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From what I understand, companies do tend to automate more if labor costs rise. If your employees cost $30/hr instead of $15/hr, it makes sense to invest in the
by notJim 6y ago
From what I understand, companies do tend to automate more if labor costs rise. If your employees cost $30/hr instead of $15/hr, it makes sense to invest in their productivity. This is one reason higher minimum wages aren't the disaster their opponents claim they are. Companies invest in productivity to maintain their profitability. Higher wages do also reduce capital's share of profits, though, which is the intended outcome.
- gruez 6y ago>Companies invest in productivity to maintain their profitability. Higher wages do also reduce capital's share of profits, though, which is the intended outcome. Shouldn't it be the other way around? Businesses have to invest more in productivity to maintain their profitability, thereby increasing the capital's share of profits because they need to pay for the capital?