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Comment: OK. But when you have an

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In reply to comment: When productivity increases, (see in situ)

OK. But when you have an

OK. But when you have an oversupply of labor and increasing productivity, wages will still fall, even when there are no monopolies or oligopolies to speak of.

If you are one of only a few mechanics in a town with three garages, you can demand a raise from your employer and he might turn over more of his profits to you to keep you from looking for work at his competition. You have bargaining power because there aren't that many mechanics around.

If suddenly 1,000 mechanics show up due to an increase in immigration quotas and more garages open, your boss will be facing increasing price competition for the same amount of customers who now have more options. Your boss will resist increasing your pay even if you become twice as productive because of the sudden influx of eager unemployed mechanics willing to work for a lower wage.

If more garages open, it will only increase downward pressure on your boss's profits. The garages who pay the least will have a price advantage over you and your boss. There will be a strong incentive for your boss to cut your pay or let you go as long as there is a supply of unemployed mechanics eager for work.

"I ain't the dying type."

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