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Under normal market conditions, they would hemorrhage current employees to any alternative local employers who raise their wages. But if all local business owne
by DanTheManPR 8y ago
Under normal market conditions, they would hemorrhage current employees to any alternative local employers who raise their wages. But if all local business owners are freezing their wages while unemployment is low, then the liquidity of the workforce freezes, and you get into a weird equilibrium. Workers might want to leave, but there's no alternative that improves their compensation. Businesses are engaged in a natural cartel behavior, but where the incentives to cheat are reversed - the first to raise wages hurts themselves the most.
- Lapsed 8y agoWouldn't the first to raise wages get the pick of employees?
- digitaltrees 8y agoAnyone remember when Steve Jobs and other tech leaders were caught making secret agreements to prevent employees from moving?
- robben1234 8y agoI've seen this in my hometown in Ukraine. It has ~20 outsource companies in different sectors and if you're good at doing what you're doing and kind of swapping jobs, there's still a ceiling they wouldn't want to break for you despite usually being paid by US citizens for their services. It's easy for companies to get new trainees and juniors as city has 2 universities with CS courses and everyone seems to want to work in IT. Most of folks who want bigger salary either move to a city with product companies (Kyiv, Odessa, Lviv, Kharkiv, etc), so there's natural competition and outsource rise their salaries too, or go remote.
- idontpost 8y ago> It's easy for companies to get new trainees and juniors as city has 2 universities with CS courses and everyone seems to want to work in IT. If its easy for them to hire, then it's not the same situation at all.