Increasing the Wage



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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%

Here’s the excel I used to make the table.

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