Some companies raise their workers pay by giving raises, but others prefer to give one-time bonuses instead.

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Some companies raise their workers’ pay by giving raises, but others prefer to give one-time bonuses instead. Think about two steel mills facing a big two-year drop in steel demand: In one steel mill, workers have received pay raises every year for five years. In the second mill, most of the pay increases have occurred through big bonuses at the end of each year. Which steel mill will probably keep more jobs during the two-year downturn? Why?
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Modern Principles of Economics

ISBN: 978-1429278393

3rd edition

Authors: Tyler Cowen, Alex Tabarrok

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