I think it’s unfortunately a tragedy of the commons/prisoner’s dilemma problem
Simplifying, a single store is not going to be able to improve pay for all the underpaid members of society, but what they can do is run thinner margins while staying in business (pay employees less, spend more on security, etc). Paying only their own employees more also does little to reduce the overall chances of theft.
Perhaps a better global equilibrium exists at higher wage rates, but there are limited options at local levels. For low-end wages, I think the downward pressure exceeds the upward wage pressure of the “free market” b/c the negotiation is between someone making a less profit vs someone failing to make a living – the negotiating power is not balanced. This is why IMO minimum wage to some degree is important.
I think it’s unfortunately a tragedy of the commons/prisoner’s dilemma problem
Simplifying, a single store is not going to be able to improve pay for all the underpaid members of society, but what they can do is run thinner margins while staying in business (pay employees less, spend more on security, etc). Paying only their own employees more also does little to reduce the overall chances of theft.
Perhaps a better global equilibrium exists at higher wage rates, but there are limited options at local levels. For low-end wages, I think the downward pressure exceeds the upward wage pressure of the “free market” b/c the negotiation is between someone making a less profit vs someone failing to make a living – the negotiating power is not balanced. This is why IMO minimum wage to some degree is important.