[logicchains]

>Is there some intrinsic reason why employers feel compelled to pay so little?

The average US small-business owner makes around $70k/year, less than most devs: https://www.cnbc.com/2020/02/28/this-is-how-much-to-pay-your... . It's not like small business are rolling in cash. The only way for them to pay more is either to raise prices (meaning everything costs more) or hire fewer people. Would you be willing to patronise a shop that charges 50% more for coffee than the shop next to it because it pays its workers more? I'd bet not.

Switzerland is a very rich country, so all wages are higher; shops can afford to pay more.

[vharuck]

>Would you be willing to patronise a shop that charges 50% more for coffee than the shop next to it because it pays its workers more? I'd bet not.

I'm not a business owner, but from a customer's point of view, I regularly settle on my favorite stores for reasons other than price. As long as it's not exorbitantly priced (e.g., $8 coffees in a small city), I prefer places that have good atmosphere, offer quality products and service, and become part of the community. A coffee shop that displays and sells works from local artists is better than a Dunkin Donuts.

My wife chooses where to shop and eat by price, and I hate it. We end up saving some money but often not enjoying it (cheap batteries that need frequent replacement, foul-tasting marinara, etc.). No matter how thrifty we were, I just see it as paying to be less happy.

[seanp2k2]

>Would you be willing to patronise a shop that charges 50% more for coffee than the shop next to it because it pays its workers more? I'd bet not. I would, assuming that it’s not just the exact same product. I really enjoy going to different coffee shops and checking out what they’ve got and what they do differently. I don’t actually care about price; I would pay $20 for a cup of something really interesting. I’m not talking about drip from an air pot, think more WBC. I wouldn’t expect someone at that level in their craft to work at a place paying minimum wage, and I wouldn’t expect the coffee shop paying people min wage to have excellent coffee, which I’m happy to pay more for.

There is a market for McDonald’s coffee as there is a market for $20/cup coffee.

[lumost]

Presumably, a business struggling to hire has too much demand to fill with their current workforce. The econ 101 solution to this is to raise prices or hire more capacity. If hiring additional capacity is impractical raising prices would be the next step.

If we're living in a world where prices are inelastic, then labor supply will also become inelastic. Presuming that successful businesses aren't trying to hire for the sake of hiring, then it's almost certain that they are raising prices to meet demand.

[thesuitonym]

Yes. Absolutely yes. If your workers make more money, they are happier and provide better service. The coffee shop next store will likely have terrible service, with high turnover because everyone there is just waiting for their chance to get out and move onto a better paying job.

Why do you think people shop at stores like Publix or Whole Foods when Walmart has lower prices? Because those stores (even though they still treat their employees--sorry, "associates" poorly) have better service, due to better pay.