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Slightly puzzled that you don't mention profit. Higher wages don't necessarily lead to higher prices if profit is reduced instead. In the for-profit care home sector for example where much work is at minimum wage, I and others have observed that very large amounts of operating profit (in some cases around three-quarters of wage costs) are washed out in payments to associated companies abroad in inflated 'admin expenses', rent or 'financing costs'. The difference between the wage bill and the real cost of production would allow considerable increase in wages with no impact on price. Less money would flow to tax havens abroad of course.
Toggle Commented Sep 29, 2021 on The minimum wage dilemma at Stumbling and Mumbling
Agree with general thrust, but for the policymaker nothing is a 'free hit' if it requires more government spending.
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Apr 10, 2018