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I think the confusion is not where the figure 1/5 comes from, but rather why that is the change in profit. It looks like you meant revenue.
by thedufer 7y ago
I think the confusion is not where the figure 1/5 comes from, but rather why that is the change in profit. It looks like you meant revenue.
- kennywinker 7y agoRight. I see how that was unclear. A 1/5 increase in labour costs is a much more precise way to frame it.
- bluecalm 7y agoIt's more precise but the whole point is that cutting 20% of profits sounds like a reasonable price to pay but once you realize increasing labor cost by 20% may mean for example 80% cut in profits it's not so simple anymore.