It is generally more profitable for a firm to pay workers more than the going wage rate:

Question

Quizplus · Accepted Answer

In sectors where skills are scarce, paying workers more than the going wage rate can attract and retain skilled employees. This can lead to lower recruitment and training costs, increased productivity, and higher profits in the long run. In contrast, paying workers more than the going wage rate in industries where worker motivation doesn't really matter or in areas where turnover is not very costly may not have a significant impact on the firm's profitability.

It Is Generally More Profitable for a Firm to Pay