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by AlotOfReading
1071 days ago
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I don't see how it can be true that rising wages results in no net gain if vendors aren't increasing costs disproportionally to their inputs. A simple model of product cost is labor costs + "other things" like materials, retail overhead, etc, multiplied by some profit margin. If worker wages double, only the labor costs have doubled. The non-zero "other things" have not doubled (they may increase, but you can apply this argument recursively until you get to the base case), so the ultimate price cannot have increased by the same proportion. Thus, all workers should have a net gain. |
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