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Federal Reserve Bank of Cleveland: 'Sticky Wages on the Layoff Margin' insurancenewsnet.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from insurancenewsnet.com Daily Mail and Mail on Sunday newspapers.
The Case for Higher Wages in Hard Times Pay cuts and salary freezes have become an unfortunate hallmark of the Covid-19 recession. Over seven million employees have seen their wages drop since March, and a great many others have had their pay frozen. But a handful of companies have bucked this trend and increased pay despite the economic crisis. In November, yogurt maker Chobani announced that it was raising its workers’ lowest hourly wage from $13 to $15; the floor was set at $18 in high-cost centers like New York. E-furniture retailer Wayfair followed suit last week with a $15 minimum. These and other companies present such wage hikes as enlightened capitalism a way to help employees during difficult times while also buying loyalty and goodwill that translate into higher productivity and lower turnover. It’s the latest entry in a century-old debate over whether companies can improve productivity and profits by paying their workers more. Economists refer to this pos ....