jc456
Diamond Member
- Dec 18, 2013
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Based on what?I seriously doubt that. When the cost of something goes down, usually so does the price. After all, businesses compete against each other.
A few years ago I bought a new big screen to replace my old broken one that couldn't be repaired any longer. I paid a little over 3K for it. About a year later, a coworker of mine bought one of the new super HD televisions for about $1,500, but it was only a 40 inch screen.
While talking about his purchase with the salesman, he mentioned my 80" television. The salesman said they do have super HD that big, but they cost about 30K.
Today you can buy a super HD television like mine for about what I paid for my regular HD three years ago.
If prices were really going down, we would have deflation.
No, prices do go down on new products. My father bought me a VCR for Christmas back in the early 80's. He paid around $700.00 for it. When CD's and DVD's became the new thing, you could buy a VCR for around fifty bucks.
Speaking of fifty bucks, that's what the new calculators cost when they first came out. I remember as a kid when my parents took us to the Home and Garden show that we had here every year. Fifty bucks was a lot of money back in the 70's for a toy. It had those LED lights and only basic functions like plus, minus and divide. Today, banks give you calculators if you open up a free checking account. Most phones have a calculator on them. It doesn't cost anything.
Cordless phones. Are you old enough to remember when they first came out? They were like $150.00 or more. By the time cell phones became popular, you could buy a much better cordless phone for about twenty or thirty bucks.
The point is that those greedy manufacturers don't keep the money in their pockets. When their costs go down, so does the price of their products.
Have you noticed all your examples are electronics? If the prices of everything are going down as you say, why no deflation?
I've worked for several big companies, and yes they pocket the money more than they don't.
That's the idea of having a business; to create products or services for a profit.
This fallacy that if we had some law that stopped people on the top from earning big money, that will trickle down to the workers is nothing buy a pipe dream. It doesn't work that way.
People are not paid for a job according to the profits of a company. People are paid according to their worth to a company.
Can they take those profits and pay people a little more? Sure they can, but it wouldn't be anything of notice to the workers. Take a CEO who makes five million dollars a year. His company and subsidiaries have about 150,000 employees. Now lower his pay from five million to three million, and divide the savings by the amount of employees and see what you have.
As for smaller companies with no CEO, it wouldn't be worth an investors time to open a business to make the same as his employees. It wouldn't make sense to open up a business if he made twice, three times, or ten times his employees. He must make much more (if he can) as compensation for his financial risk, the hours he had to put in, and the operation of the business.
Corporations have plenty of profits to pay better. Profits have been increasing for many years.