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When a Changing Labor Market Changes Business

There are innumerable great examples of goods in related markets. And of complements and substitutes. (One of my favorites is the local store that sold rock music and condoms, clearly complements.) It’s harder to cook up neat examples of goods markets that are impinged upon by labor-market changes.
An acquaintance told me how his business, a retail fabric store, failed gradually over the 1980s and 1990s. Sales did not grow, while costs did. He attributes his problems to a leftward shift in the demand curve for fabric for home sewing, generated by the huge rise in female labor-force participation over this period (an increased supply in the labor market). With fewer women engaged in home production, demand for the complement of home time-fabric-decreased. Better examples, anyone?


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