4 ms·

Some businesses' economics simply don't make sense if their labor costs grow X%. Maybe they can charge more to make up for it, but it's actually not as simple

Some businesses' economics simply don't make sense if their labor costs grow X%. Maybe they can charge more to make up for it, but it's actually not as simple as "this business owner is being cheap."

Jaygles 3y ago
Yeah, the larger symptom is there is less money to go around after buying necessities. Inflation stings twice, cost savings on necessities will include shifting purchases from less-efficient local businesses to more-efficient global mega corps. And the slice of income that goes to desires will shrink which also reduces spend on local businesses. So the local businesses get hurt from both ends. Their costs of inputs also rise, and the demand for the services decrease. The only businesses who can keep or lower prices and also pay more for labor are one's that have large profit margins. And then even if there's enough profit margin to survive the hair cut, that may lead to a situation where the business owner's time and effort could be better spent on other opportunities. So even profitable businesses may close if the owner thinks they could do better.
SuperNinKenDo 3y ago
Yes, of course, but it's not workers' responsibility to make sure business owners have sustainable businesses. If your business model relied on getting timber for half the market price, that's called running a business badly. If you then started crowing on "What's wrong with you people? Why won't you lazy businesses sell me bloody timber?!" You'd rightly be considered deranged.
ttymck 3y ago
"this business model is cheap", then?
xtracto 3y ago
Then those should not exist. Or should be outsourced to markets where labour costs match
tomjen3 3y ago
When the economics doesn't make sense, then you close the business down. You don't complain that people don't want to work any more.

4 ms·

Some businesses' economics simply don't make sense if their labor costs grow X%. Maybe they can charge more to make up for it, but it's actually not as simple

by fullshark 3y ago

Some businesses' economics simply don't make sense if their labor costs grow X%. Maybe they can charge more to make up for it, but it's actually not as simple as "this business owner is being cheap."

Jaygles 3y ago
Yeah, the larger symptom is there is less money to go around after buying necessities. Inflation stings twice, cost savings on necessities will include shifting purchases from less-efficient local businesses to more-efficient global mega corps. And the slice of income that goes to desires will shrink which also reduces spend on local businesses. So the local businesses get hurt from both ends. Their costs of inputs also rise, and the demand for the services decrease. The only businesses who can keep or lower prices and also pay more for labor are one's that have large profit margins. And then even if there's enough profit margin to survive the hair cut, that may lead to a situation where the business owner's time and effort could be better spent on other opportunities. So even profitable businesses may close if the owner thinks they could do better.
SuperNinKenDo 3y ago
Yes, of course, but it's not workers' responsibility to make sure business owners have sustainable businesses. If your business model relied on getting timber for half the market price, that's called running a business badly. If you then started crowing on "What's wrong with you people? Why won't you lazy businesses sell me bloody timber?!" You'd rightly be considered deranged.
ttymck 3y ago
"this business model is cheap", then?
xtracto 3y ago
Then those should not exist. Or should be outsourced to markets where labour costs match
tomjen3 3y ago
When the economics doesn't make sense, then you close the business down. You don't complain that people don't want to work any more.