Would you buy the bill below for $5.00?
I have authentic $10 bills for sale at the bargain price of $5.00 each. How many would you like?
The answer, of course, is all of them. You would buy everyone I had. If your entire net worth was $5.00, you would buy them all. If you had no money, you would take out a loan to buy them all.
Now, what if I told you that I was selling $10 bills for $20. How many would you buy? None. You would buy not a single one.
But what about really rich guys. Billionaires could afford to buy millions of by $10 for $20, right? of course they could. How many would they buy? None. A billionaire wouldn’t purchase a single $10 bill for $20. That he could afford it is irrelevant.
There in nothing very profound about any of this. But now tell me, why would anyone pay a minimum wage of $15 per hour to an employee who only adds $10 per hour of profit to the business? They wouldn’t. In fact, they wouldn’t buy one hour. That the business is profitable is irrelevant.
They wouldn’t buy a single hour of $10 labor for $15 per hour for the same reason you wouldn’t spend $20 to buy a $10 bill.
They would, however, hire as many employees as possible who create $15 per hour in profit for a wage of $10 per hour. They would do this for the same reason you would buy $10 bills for $5.00 each.
Why is this so difficult to understand?
Source: http://therealrevo.com/blog/?p=159049
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