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Because then they would lose profits. If labor becomes more expensive, maximal profit would be found at producing less and charging more, but overall profit wou
by TchoBeer 5y ago
Because then they would lose profits. If labor becomes more expensive, maximal profit would be found at producing less and charging more, but overall profit would decrease.
- Robotbeat 5y ago...you’re ignoring demand effects. Higher wages means more aggregate demand. Empirical research on minimum wage increases shows that this basically fully compensates for hypothetical disemployment effects.