According to efficiency-wage theory,paying higher wages than competitors lowers labor costs due to more efficient workers.

Question

Quizplus · Accepted Answer

Efficiency-wage theory suggests that paying higher wages than competitors can lead to more motivated and productive workers. This can result in reduced turnover and training costs, fewer work stoppages, and higher quality output. In the long run, these benefits can offset the higher wage costs, resulting in lower overall labor costs.

According to Efficiency-Wage Theory,paying Higher Wages Than Competitors Lowers Labor