> businesses will have to increase production, and hire more workers to do so.
they will have to pay the workers more to entice them in, and provide better working conditions.
this will generate more work, and higher consumption.
The problem is, noone has tried to see the complete picture by adding up these effects. The net effect is probably negative, unless this is introduced all over the world simultaneously.
Businesses will hire more people and pay them more => prices will go up, purchasing power for domestic products will go down (i.e. the same income will afford fewer domestic products). Imports will go up because those products will be cheaper than before in comparison. Exports will go down for the same reason.
Therefore, a large part of the expected higher consumption will go to imports / foreign profits. Due to reduced exports, domestic production will go down instead of up. Since jobs cost more now, there will be even fewer of them than expected.
Overall, countries which introduce this, will suffer.
I'd expect people to buy (more) imported products rather than (the same amount of more expensive) domestic products.
It would probably be worthwhile to give people part money and part vouchers for certain eligible (i.e. domestic but some international treaties might not allow this discrimination of imported goods) products, in order to keep the purchases of domestic goods at a high level.
they will have to pay the workers more to entice them in, and provide better working conditions.
this will generate more work, and higher consumption.
The problem is, noone has tried to see the complete picture by adding up these effects. The net effect is probably negative, unless this is introduced all over the world simultaneously.
Businesses will hire more people and pay them more => prices will go up, purchasing power for domestic products will go down (i.e. the same income will afford fewer domestic products). Imports will go up because those products will be cheaper than before in comparison. Exports will go down for the same reason.
Therefore, a large part of the expected higher consumption will go to imports / foreign profits. Due to reduced exports, domestic production will go down instead of up. Since jobs cost more now, there will be even fewer of them than expected.
Overall, countries which introduce this, will suffer.