American Apparel is the largest T-shirt manufacturer in the United States. All o

Question

American Apparel is the largest T-shirt manufacturer in the United States. All of its manufacturing is done in a single factory which employs 4,000 workers in central Los Angeles. The owner of this firm, Don Charney, has been praised for treating his workers well. He pays them above min wage, the employees can purchase subsidized insurance for $8 a week. They are also entitled to meals, free parking, and english lessons. Mr. Charney claims not to be an altruist. He is simply trying to maximize profit. why might Mr. Charney's profit be higher by paying all the added benefits to his workers?

Explanation / Answer

There is a cost for hire/fire workers.If you have to train your workers you do not want change workers as often as minimum pay will lead to. The workers will also work harder because they are more afraid of loosing their job and you may get some good PR. My guesses.

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