Toddsterpatriot
Diamond Member
Where does the money come from to pay them more? When faced with higher labor costs a business has 3 choices: 1. raise prices, 2. lay off employees, 3. go out of business.
So explain how putting more people on the unemployment rolls helps the economy.
One of the biggest low wage employers is Wal Mart which is fairly profitable so they will have to decide what the best course of action is for them which may just mean less profit. The link below has this little game type of thing that can help you understand more about the decision process a company goes through when an input sees a price increase.
No matter the answer the economy will be able to adapt and move on just like it always does when prices change. The doom and gloom rhetoric surrounding a price change is kind of hilarious.
Practice Interview Cases
It is the Interactive case concerning airlines.
One of the biggest low wage employers is Wal Mart which is fairly profitable
Their net income last year was less than 3.5% of sales.
Wal Mart would be able to survive the price change just fine.
Yes, Wal Mart and their low profit margin business will do fine.
It is hilarious that anyone would even think to fear monger over how well wal mart will be able to handle a minimum wage increase.
Who fear mongered? Where?
I just put real numbers to your claim that Wal Mart is fairly profitable.