3 ms·
This is a flipped version of the lump of labor fallacy. If the price of a service is too high, some consumers will do without. So sure, you can double the wages
by greglindahl 10y ago
This is a flipped version of the lump of labor fallacy. If the price of a service is too high, some consumers will do without. So sure, you can double the wages of housecleaners, but that might drastically shrink the number of houses being cleaned.
You've already seen this play out in manufacturing: industries with high wages have tended towards automation and/or offshoring work to low wage countries. If you're building automobiles, there's a limit to what consumers are willing to pay for an auto.