Increasing the Wage
September 29, 2015
This site utilizes Google Analytics, Google AdSense, as well as participates in affiliate partnerships with various companies including Amazon. Please view the privacy policy for more details.
Just a table on what the effect of increasing a wage would be. It is assuming that it takes one hour to make one loaf of bread.
Row 1 is before, row 2 is if bread price does not increase, row 3 is if bread price increases such as the profit increases at the same dollar rate as labor, and row 4 is if bread price increases as the profit increases at the same percentage rate as labor. Labor / bread is how many loaves a laborer can afford per one hour’s work, profit / bread is how many loaves the owner can afford per loaf sold. Unaffected / bread is how many loafs someone whose income did not increase can afford.
| cost of bread | labor / hour | profit / hour | labor / bread | profit / bread | unaffected / hour | unaffected / bread | |||
|---|---|---|---|---|---|---|---|---|---|
| $1.00 | $0.50 | $0.50 | 0.50 | 0.50 | $5.00 | 5.00 | increase in labor | ||
| $1.00 | $1.00 | $0.00 | 1.00 | 0.00 | $5.00 | 5.00 | $0.50 | no increase | |
| $1.50 | $1.00 | $0.50 | 0.67 | 0.33 | $5.00 | 3.33 | same $ increase | $0.50 | |
| $2.00 | $1.00 | $1.00 | 0.50 | 0.50 | $5.00 | 2.50 | same % increase | 100% |
Leave a Reply
Thank you. Your comment will be visible after approval.
Your comment has been submitted, but their seems to be an error. Check your browser console for more details.