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In two months, the legal minimum wage in the country of [#permalink]
 22 May 2012, 09:37
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14% (03:04) correct
85% (01:33) wrong based on 4 sessions
In two months, the legal minimum wage in the country of Kirlandia will increase from five Kirlandic dollars(KD5.00) Per hour to KD5.50 per hour.Opponents of this increase have argued that the resulting rise in wages will drive the inflation rate up.In fact its impact on wages will probably be negligible, since only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour. Which of the following, if true, most seriously weakens the argument? A Most people in kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a year. B Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulations. C Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees. D The greatest growth in Kirlandia’s economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage. E The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family ,even when working full time at that job.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
22 May 2012, 10:49
We need to select an answer choice that weakens the argument that the wage increase will not lead to inflation as most workers are already being paid at the higher wage level. Choice B is incorrect because there is no guarantee that firms who operate outside the legal purview now will follow the minimum wage rule after the minimum wage is raised. Choice C indicates this correctly. If the pay levels of trained workers must be above those of trainees, their pay must go up too. This is the best choice. It does not depend on the proportion of trainees in the workforce, or on the magnitude of difference between trainee pay levels and trained worker pay levels. After they are trained, the trainees will go to higher wages too. If these higher wages are significantly above 5.5, it will cause inflation. If they are not, and even if trainees are small proportion of the overall workforce, the trained workers will still all move up further, which will cause inflation. Either way, overall wages will rise and cause inflation. Source of the Q?
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Last edited by GyanOne on 22 May 2012, 11:20, edited 1 time in total.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
22 May 2012, 10:52
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Are you sure about answer being B?
Most definitely looks like it should be C.
We have to look for something which implies that many workers will be affected by the new minimum wage.
A) Don't care about time
B) If the companies did not comply with the law before, they will not comply with the new wage either
C) If you raise the level of minimum wage and you have to keep trained workers higher than minimum wage then it will have an effect
D) Don't care about other sectors
E) Minimum wage being enough or not is irrelevant
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
22 May 2012, 10:56
GyanOne wrote: We need to select an answer choice that weakens the argument that the wage increase will not lead to inflation as most workers are already being paid at the higher wage level.
Choice B does this best by indicating that there are some firms which have paid their workers less than even the KD5.0 minimum wage. If the wages of these workers rise from those low figures to KD5.5, it will lead to inflation. I think this is where the confusion sets in. What is the exact argument of the statement? I think this is poorly written because there are 2 clear arguments. 1) Opponents of this increase have argued that the resulting rise in wages will drive the inflation rate up. or 2) In fact its impact ( effects of minimum wage increase) on wages will probably be negligible
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
22 May 2012, 20:21
imo it should be C. if you are not following the law, raising the wage to 5 or 15 doesnt make any difference. the question quality seems a little poor.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
22 May 2012, 23:27
Arguement:
If minumum wage is increased, inflation will go up.
What would weaken the argument. ---> Even though the wage is increased, the inflation wont go up.
B - Few firms pay less than that mentioned by norms set out by government.
If the firms continue to do so, the workers would continued to be paid lower wages and inflation would be not go up.
C - If trainees' wages go up, trained workers wage should also go up. This will increase the inflation. - Strengthens the arguement.
I will go with B.
If anyone has a better explanation to support or counter me, please do so.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
23 May 2012, 06:24
ok so it boils down to what is the conclusion of the argument? i thogth it was - In fact its impact on wages will probably be negligible , since only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink]
23 May 2012, 06:30
sidhu09 wrote: Arguement:
If minumum wage is increased, inflation will go up.
What would weaken the argument. ---> Even though the wage is increased, the inflation wont go up.
B - Few firms pay less than that mentioned by norms set out by government.
If the firms continue to do so, the workers would continued to be paid lower wages and inflation would be not go up.
C - If trainees' wages go up, trained workers wage should also go up. This will increase the inflation. - Strengthens the arguement.
I will go with B.
If anyone has a better explanation to support or counter me, please do so. isn't the arguement about having "no" impact by increase in small amount of salary? then C is going against it.. For B, its already mentioned 'some' i did chose C on these grounds
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Re: minimum wage in the country of Kirlandia - confusing CR
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23 May 2012, 06:30
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