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You said you're differentiating between long and short term, but I think you're actually talking about the difference between "one company's interest" and "all
by savanaly 11y ago
You said you're differentiating between long and short term, but I think you're actually talking about the difference between "one company's interest" and "all companies' interests". It is possibly in all companies' interest to all pay their employees more as it would stimulate demand for their products. But any given individual company's own workers are such a vanishingly small fraction of its own customer base that it could hardly ever be argued that it would be best for that particular company to pay its own workers more for the purposes of stimulating demand.
- lfowles 11y agoYour workers will be more invested if they can comfortably afford the product, though. Obviously this depends on the market.
- savanaly 11y agoOh, no doubt that can be a reason. The literature around the "efficiency wage" is well developed [1], my comment was only disputing that there were a reason to pay above market clearing wages for reasons of stimulating demand. [1](https://en.wikipedia.org/wiki/Efficiency_wage https://en.wikipedia.org/wiki/Efficiency_wage)
- ktRolster 11y agoYour workers will be more invested if they can comfortably afford the product, though. Most of the companies I've worked for I would never buy their product: either because I didn't need it, or because I knew its true quality, or both.