Wage Increases and Applicant Pools
A local manufacturing plant is struggling to fill 20 vacant positions at its current wage offer of $15 per hour. An advisor suggests that raising the wage to $18 per hour will likely solve the hiring shortage. Explain the economic reasoning behind why this wage increase is expected to attract a larger number of willing applicants.
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Candidate Minimum Salaries:
- Alex: $90,000
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Wage Increases and Applicant Pools
A company doubles its wage offer for a specific role. According to the principle that higher wages attract workers with higher minimum salary requirements, the company should now expect to have twice as many willing applicants for the position.