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Or raise prices, or accept less pay at the top.

>accept less pay at the top.

For a second there I thought you we're being serious!

When everybody raises prices at the same time, business survive.

Only if demand is entirely in elastic.

You can be damn sure if the cost of mobile phones suddenly doubled, a lot fewer phones would be purchased and companies would go out of business.

Of course labor makes up a fraction of the total cost of a phone, so doubling your labor costs does not double the unit cost of a phone.

My comment was in response to “When everybody raises prices at the same time, business survive.”

Which is clearly not true.

I was initially going to add something on demand elasticity...

But it is not obvious at all how demand responds to global increases in salary. It tends to increase more often than decrease.

For $1/hour? I'd hope it would force them to review their expenses. But you're right, it won't, they'll just cut hours.

If they could cut hours or staff numbers they already would have done so.