Comment by starspangled
Comment by starspangled 2 days ago
Nobody would be investing in labor intensive industry because it doesn't return as well, so there would be a huge oversupply of labor, so prices would already be at their floor.
That doesn't seem to be what's happening though.
Economic systems aren't typically describable with terms like "nobody." There's an equilibrium in investment levels between capital- and labor-intensive sectors, and that equilibrium is moving. If there was a huge oversupply of labor, then it'd make it more compelling to invest in labor-intensive sectors, which would both shift the equilibrium and eliminate the oversupply (which is what has already happened/is happening every hour of every day, thus there's no massive oversupply).