Say you have a small factory ,employing 50 older welders doing a risky job at relatively little pay.
Say you need 10 more welders - but those guys really don't like risk so they would need a big increase in the salary, maybe 50%-100%. But you know that than the word will get out and the older workers will demand similar salaries.
So it's a big jump in total labor-costs per work-unit. And let's not forget - revenue per employee can be quite limited in many places. So maybe paying low is the better state for the business.
Say you need 10 more welders - but those guys really don't like risk so they would need a big increase in the salary, maybe 50%-100%. But you know that than the word will get out and the older workers will demand similar salaries.
So it's a big jump in total labor-costs per work-unit. And let's not forget - revenue per employee can be quite limited in many places. So maybe paying low is the better state for the business.