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Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have
Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have been relatively stable; and that several US states have recently raised their minimum wages from $8.25/hour to $15/hour (or more). What is the likely effect of this change in US wages? Choose the best answer only. Many US manufacturing companies send their unfinished product across the borders to Mexico for part of their processing. Suppose that the wages in Mexico have been relatively stable; and that several US states have recently raised their minimum wages from $8.25/hour to $15/hour (or more). What is the likely effect of this change in US wages? Choose the best answer only. There will be no effect because the supply chain is already optimized. Wages in Mexico will increase to $15/hour. US companies will shift more of their processing to Mexico. US companies will shift more of their processing from the states that raised their minimum wages to both Mexico and the states with relatively low minimum wages
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