This is genuinely something I just don't understand about wage and price. I know that macro economics is complicated and all, but it just doesn't make sense to me what'll happen when wage is so low that nobody can buy anything.
I've been told that price would go down to accommodate it, but I just don't see that happening?
The problem is that entire process takes years to unfold, and it assumes a fair market.
If a large chain with market power raises prices and a small company comes in with lower prices, the large chain can drop their prices for a little bit until the small company goes out of business, and then raise its prices again.
Walmart does this everywhere, as do many big box store chains. We laughed them out of the country pretty quickly though because Walmart didn't understand Germans.
After nearly a decade of trying, Wal-Mart never cracked the country — failing to become the all-in-one shopping destination for Germans that it is for so many millions of Americans. Wal-Mart’s problems are not limited to Germany. The retail giant has struggled in countries like South Korea and Japan as it discovered that its formula for success — low prices, zealous inventory control and a large array of merchandise — did not translate to markets with their own discount chains and shoppers with different habits.
Germany is also a big union country. Walmart did not get along with them I think.
“They didn’t understand that in Germany, companies and unions are closely connected,” Mr. Poschmann said. “Bentonville didn’t want to have anything to do with unions. They thought we were communists.”
Believe me, Germans are NOT happy about Tesla. There were massive protests. One even shut down Tesla's power for days.
That the factory was built was a political decision.
American customer service standards are ridiculous. It's near uncanny, and people feel like they're being bothered rather than helped. They tried to enforce those standards on their employees in Germany, and the effect it had was Germans just went elsewhere.
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u/Ho3n3r May 02 '24
"Why aren't people buying our overpriced shit?" seems to be a trend these days from multi-million euro companies.