This site utilizes Google Analytics, Google AdSense, as well as participates in affiliate partnerships with various companies including Amazon. Please view the privacy policy for more details.

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.