the world is still entrenched in the supply-and-demand mindset. if demand is reduced then supply should be reduced. which can imply layoffs.
Nestle uses slavery in Africa to produce chocolate. I think penalizing them for that is a far bigger concern than a worker losing their job because I refuse to buy Nestle products.
I think you’re referring to the boycotting of buying products (correct me if i’m wrong). If we are thinking in a strictly demand-supply framework for goods (which I think you are), then there are two things that could happen. First is that a boycott of impactful size would shift the demand curve for goods inward. All else equal, this would lead to a reduction in the quantity demanded and supplied of the good, and the price of the good would fall (see figure 1). In a lot of intro level economic theory, this is where we stop due since we tend to invoke the concept of ceteris paribus. Though what you’re saying is that a reduction in demand for goods may have adverse affects on the labor market. Figure 2 describes the effect of a shift in preferences for a given labor market. For example, consider we are looking at the market for Nestle products (as shown in Figure 1). In Figure 2, we are examining the labor demands for the Nestle company. Given a negative shock to the demand for Nestle products, the demand curve for workers at Nestle will shift to the left.
What happens next relies on what theory of wages you subscribe to. If you subscribe to the theory that wages are sticky (most are since you never hear of less pay being offered, but instead less jobs being offered), then you will see substantial unemployment occur (Figure 2). If you subscribe to the theory that wages are flexible, then wages will lower to account for the loss of income from the company due to reduced demand, but employment would stay the same, just at a lower wage level (Figure 3). There is much more evidence for sticky wages, so in general, I would agree with your statement. (Source: I am a Ph.D. candidate in Economics and am teaching labor economics for undergraduates).
All this being said, using demand-supply to illustrate real-world outcomes will always fall short. Intro level economics provides useful tools and models to help conceptualize the world, but the world does not operate under the strict conditions that make these models possible.
I have heard of companies offering “less pay” quite often. Usually smaller companies threatened with insolvency, usually trying to stave off absolute failure or perhaps to keep more people employed longer. That said, the example almost makes the case that wages are sticky since it happens uncommonly and not-at-all smoothly.
Yeah it’s actually really uncommon, because reducing someone’s pay but expecting the same level of work/output will automatically lead to the best workers moving to other companies.
Probably, in the short term. But there should be a long term goal when boycotting. Companies don’t want there bottom line affected long term and they are more inclined to wait things out in the short term.
Well the supply demand workset… when one company fails… another rises up… yes people will be laid off, and where we buy from instead will need to hire people to make up for their increase in business.
Some companies shouldn’t be supported in any way, neither with money nor time (labor)
Layoffs hurt the company long term when the company should hope a boycott is short term.
I have never heard of a company of any sort that thinks in a mindset which reasonable people would consider “long term”. I have read numerous articles about this over the years, all whining and lamentations about how company X or corporation Y fail to think in the short term… their corporate structures tend to discourage that, as they are run by CEOs who only wish to cash out on the stock options they get as the larger part of their compensation.
If this translates to your scenario at all, then they might well ignore the long-term implications of layoffs.
