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In practice, banks' response is entirely predictable: they will crank up base salaries, thereby making their cost bases less flexible.
These new banks have advantages over the incumbent players, which are weighed down by high cost bases of branches and old technology.
Companies' cost bases differ but this much seems clear: the national living wage will not destroy the profits of successful mainstream retailers.
Lowe noted that "increased competition has forced existing retailers to find efficiencies to lower their cost bases and, in turn, their prices".
The big three are in dire trouble because of poor sales, high debts and cost bases that are less competitive than those of foreign-owned rivals.
Those firms are working hard to strip down their cost bases by shedding employees and minimising the risk of trading blow-ups over the next year.
Similar(37)
"We are looking at the cost base all the time.
We are then stuck with a higher cost base".
"This is all about getting the right cost base".
Our [British Airways'] fuel bill represents 35%-37%-37%our cost base.
It should be born in mind that Travel has a largely variable cost base – turnover rents in travel locations probably accounting for 50%-60 50%-60e Travel cost base.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com