jasonnfree
Gold Member
- May 23, 2012
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This sounds contradictory so let's sort it out for clarity....Whenever we have a recession, firms don't hire and lay people off to decrease costs. Labor is an input cost. Firms will only hire if they have a boost in sales or an expectation of increased sales...
When the economy contracts sales fall and firms lay off workers. They begin by laying off the least profitable employees first, and this applies to both high and low paid workers --if they cost more in compensation than they produce in company earnings, they're gone. Raising the minimum wage--
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--can only increase the chance that a low pay worker will find himself on the 'bad' list.
Is it possible that raising the wages of those on the bottom will help the economy since the money they spend will go back in the economy by buying necessities? Incomes at the top don't always buy retail as much but invest in other ways, may be not helping the economy.