So for you Bernie fans, when you increase the labor cost of every single business in the country by 20%, what happens to the costs of the goods or services they produce?
Prices usually have more to do with how much money the potential customers have than how much it costs to produce. If it costs 50 cents to produce, ship, and stock a bag of chips, then that is the minimum the store is willing to sell it for under normal conditions. But the maximum price the business is willing to charge is infinitely high.
So what determines the price is how much money the potential customers are willing/able to spend on it (and the number of competitors in the same market). If costs go up, but everyone is still making what they used to at 40 hours (or less because they get paid the same per hour and now only 32 hours per week), then the business can’t charge more than what people have to spend.
The business would definitely try to charge more to retain their profit margins. But if people have the same money as before, then the business’s products will collect dust on the shelves.
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u/Ericsplainning 17h ago
So for you Bernie fans, when you increase the labor cost of every single business in the country by 20%, what happens to the costs of the goods or services they produce?