weekend4trvl wrote:What he failed to mention is that 2900 of those jobs were in Nicaragua and paid 17 cents an hour. My guess is the only employees that ever made a living wage were the sales people. Rolling cigars in a sweat shop pays just over minimum wage. If there is a market for cigars someone will provide them.So if he closes his doors...no problem. The central American tobacco industry does not has a very good pension plan...does it.
Well, I can comfortably conclude that you aren't an economist. The concept of "market" makes no sense when completely divorced from price. There may be a huge market for a product at a certain price, but a much smaller or non-existent market for that same product at a marginally higher price.
So in the face of rising costs (e.g., those caused by higher taxes), a business has limited choices. It can pass the costs on in product price, causing an erosion in purchase volume. It can eat the costs in the form of lower business profits. It can lower its own costs by, for instance, laying off workers. Or it can do some combination of the above. But when costs increase beyond a certain point it becomes impossible to operate at a level of anticipated profit that makes remotely good business sense. And if it closes its doors, it is unreasonable to expect anyone else to come in and fill the void, because they will face the same risk/reward calculus as did the original business (which actually had an advantage in that it was already a going concern).
As far as Central American wages and pension plans, I'm not sure what those have to do with anything this discussion is about, but perhaps you could, for my edification, tell me how much Nicaraguan tobacco workers are supposed to make.
