Unemployment equilibrium: Firms refuse to hire, workers accept lower wages.
The article discusses how full employment may not always be beneficial for companies, as it could lead to workers demanding higher wages and causing political tension. The researchers argue that firms may prefer to keep some level of unemployment to maintain control over workers and ensure higher work intensity. They found that when firms pay higher wages relative to other job opportunities, workers are more likely to work harder. This creates a trade-off for companies: higher wages increase costs but also increase worker productivity, potentially maximizing profits.