For most goods the technology of production allows at least some room for choice in the exact proportion of capital and labor that is used in production. In some cases however technology is such that capital and labor must be used in strict proportion to each other allowing one and only one capital/labor ratio in production. Examples include airplanes which require a fixed crew size or a bus, or train, or station booth which all require a fixed number of labor.
We are also aware of the MTA’s goal of substitution of the station agents with technology however we know there are constraints. We will use an excellent example between the difference in the ease of substitution in both capital and labor. MTA operates almost like a firm that wants to maximize profits. The principle of a private firm is that a firm will never pay workers a wage that is higher than the minimum necessary to attract a sufficient supply of labor since doing so would raise labor costs and reduce profits. This motivation to maximize profit is reinforced by the quest of gain on the part of the owners of the firm, therefore one wonders why the current management operates in this fashion.
Since capital and labor are required in fixed proportions, it is impossible to produce a given level of output with more of one but less of the other. Second if one factor is held in constant, adding more of the other will not increase output at all, maybe Joseph Lhota is aware of those principles. There are less station agents thus it is impossible to produce at given level. We recommend rehiring the laid off station agents to bring the production at the given level.
