We need a Laffer curve to explain to some of the management types that a lower wage rate does not AUTOMATICALLY translate to a lower unit labor cost! I have been working at the same job for three years because at my age I cannot get an interview for anything in line with my abilities and I must keep medical coverage for my wife. I have seen good people leave and seen new people hired a couple of months later for two cents an hour MORE than the person who left was earning. The pathetic part is that at least two of those who left were super productive and possessed skills that will not be learned by a new hire in less than two years if we are lucky. In most cases they will not be able to hire anyone who will EVER be as good as the two I am referring to. A two dollar an hour increase would probably have kept both of these men working and would have been far less expensive than trying to replace them. It will take at least THREE good people to do what these TWO were doing. You can't hire enough average people to do what they were doing. In my humble opinion one of the major problems with American industry is that there is no incentive for people who truly excel in everyday job categories. At least there isn't in the place where I work.
The Laffer Curve is a good tool for lots of reasons.
Productivity of a business is often increased by offering a bonus or other benefit. Not just for faster work, but for smarter work with new ideas, new equipment and/or software.
I agree that the lowest cost price is often more expensive in the long run.