Final answer:
Local employers might pay fair wages to prevent other local firms from hiring away their workers, to comply with minimum wage laws, to motivate workers, and to deter outside firms from moving in and increasing labor competition. The correct option is (a) Other firms in the same area could bid away workers & (d) Firms from other areas may move to where wages are low
Step-by-step explanation:
Local employers might pay workers the value of what they produce, even if these workers are reluctant or unable to relocate for better job opportunities, for several reasons. Firstly, other firms in the area might entice workers with higher wages, which leads to a competitive wage environment.
Furthermore, minimum wage legislation requires employers to pay a certain base level of compensation, thus ensuring workers receive a wage that matches or exceeds the stipulated minimum. Additionally, paying workers well can serve as motivation, enhancing their productivity and loyalty to the company, known in economic terms as the efficiency wage theory.
Moreover, if firms from other areas recognize that wages in a particular region are low, they may decide to relocate their operations to that area, increasing competition for local labor and potentially driving wages up.
Therefore, by providing fair wages, employers mitigate the risk of a workforce drain for new companies establishing locally. Keeping wages at a reasonable level also reduces turnover and the associated costs of training new employees, which is another economical consideration for local employers.