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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (206514)	10/14/2004 2:39:15 PM
From: combjelly	Read Replies (1) \| Respond to of 1574419

"That's one probable outcome.....others are:" There are other factors too. For one, if the bottom tier has more money, they tend to spend it. Not only do they spend it, they tend to spend it at other businesses with small margins. Those businesses, in turn, likely employ a high percentage of minimum wage earners. With smaller margins, a higher percentage of their costs tend to be wages and that money tends to stay in the community instead of concentrating in the larger financial centers in the country. In addition, the velocity of the money tends to be higher with it changing hands at a higher rate than income going into higher margin businesses. And that means there is effectively more money in the system, leading to more hiring. This moderates the problem with cutting profit margins because overall sales tend to increase because there are more people with jobs who can afford at least some small luxuries. Downside. There is less money for investment.