General Discussion
In reply to the discussion: Fast food jobs in Denmark pay living wage [View all]JonLP24
(29,322 posts)The rising fixed costs would cause some firms to exit the market and other firms in different markets would adjust by lowering the hours in the case of McDonald's it wouldn't apply. They can afford to do a lot of things but they offer the lowest wage they can get away with (so are the Lions with Calvin Johnson but he is more difficult to replace). The rising fixed costs wouldn't have the effect the variables where the market is competitive (KFC, Burger King, Subway) for employees it wouldn't effect things. Based on the theory the the competition is monopsonistic in nature (agreement or close to it in this case among competitors not to pay more than a fixed price for a key input such as labor) would see an employment increase in-theory anyways.
You're right though but the effects (increase, decrease) vary depending on market, firm, costs, etc -- sure a company can do the manufacture side of things with the labor laws and wage offers in Malaysia but fast food will have to somehow sell fast food to people in America.
I had problems sleeping last night so I may be viewing your description and getting the headache like backing up a semi tractor-trailer but what would you describe in Denmark should have to opposite effect on wages. Especially the machine. But I could easily viewing this backwards but I think the economist in the article perfectly explains the reason which includes similar reasoning you used to explain higher employment in states with higher minimum wages.