lrcammarosanoThe size of the underground labor market and what impact the existence of unions or the threat of unions has on labor costs need to be taken into account in determining US labor costs.
Also the United States’ labor costs extend beyond salaries. Each full time employee has additional expenses employers must bear related to their compensation packages including, health and dental insurance and social security taxes. (some of these are offered to be competitive with unions)
US employers have to add to their labor costs the cost of complying with state and Federal work place regulations which involve training and sometimes physical alteration of the workspace. We must also average in the costs of lawsuits and fines for non compliance.
We start with a simple Crusoe example, move towards simple medium of exchange examples and build progressively towards more complex situations that devolve increasingly away from fair exchanges and towards handouts, taxes, plunder and bailouts. The latter examples involve third party interference (by governments and unions) of transactions that are intended to be the result of the free actions between two parties.