![]() Lower profits make further investment less attractive, so he’ll spend his money or invest elsewhere. The problem with sticking it to the man this way is that, whatever else he may be, he’s not stupid. The cartel of workers pushes up the price of their services for other consumers one group is enriched at cost to all others.Ī more tempting resolution to this problem is that higher wages come at the expense of company owners’ profits instead of consumers’ value for money. In the latter case, it should be clear that the greater good is served no more than when gas stations fix prices. What happens next is the business must cover the additional labour costs in one of two ways: either a sacrifice in profitability, or an increase in the price of what it sells. ![]() This advertisement has not loaded yet, but your article continues below.
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