The competitive wages predicts that three adjustments will take place in the labor market. The first prediction is that employment will decline. This prediction is borne out by the assumption that shows manufacturing employment declined in Fargo.
The second prediction is that the absolute dollar value in wages is declining. This is borne out of current prices and the ability of dollar purchasing power which is in decline against rising prices.
The third prediction is that the level of wages in Fargo relative to wages in other labor markets should also decline.
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