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In two months, the legal minimum wage in the country of

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In two months, the legal minimum wage in the country of [#permalink] New post 22 May 2012, 08:37
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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.
[Reveal] Spoiler: OA
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink] New post 22 May 2012, 09:49
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.

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Last edited by GyanOne on 22 May 2012, 10:20, edited 1 time in total.
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Re: minimum wage in the country of Kirlandia - confusing CR [#permalink] New post 22 May 2012, 09:52
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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] New post 22 May 2012, 09:56
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] New post 22 May 2012, 19:21
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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] New post 22 May 2012, 22:27
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] New post 23 May 2012, 05:24
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] New post 23 May 2012, 05:30
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 [#permalink] New post 06 Feb 2014, 05:00
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 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.

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Totally agree with GyanOne on this one.
Can we have the OA reviewed please? I hope its C

Please correct OA on this one, just confirmed that answer is C ok?

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Re: In two months, the legal minimum wage in the country of [#permalink] New post 24 May 2014, 14:00
Bumping here for experts opinion on B vs. C, I honestly think C is a much stronger choice...but still I'm no CR expert
Eager to see replies by pqhai, RJacobs and other CR monsters out there.

Thanks!
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Re: In two months, the legal minimum wage in the country of [#permalink] New post 24 May 2014, 23:31
gmihir wrote:
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.


My answer is C.

POE:
A. The duration of employment at minimum wage has no bearing on whether raising the minimum pay will trigger inflation.
B. If they are in violation now, then they can be in violation at any point in time. Changing the minimum legal wage has no impact on people who are already working outside the legal boundary.
C. This is correct. If the businesses pay minimum wage to trainees and have to maintain a higher pay for trained workers then increasing the minimum wage for the trainees will force the businesses to also increase the wages of the trained workers. This may have an impact of triggering inflation.
D. We are not worried the sector that has given growth to Kirlandia; we are worried about Kirlandia as a whole.
E. We are not worried about whether the current minimum wage is enough to sustain a person with a single job. We are worried about whether the increase in minimum wage will trigger inflation.
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Re: In two months, the legal minimum wage in the country of [#permalink] New post 25 May 2014, 15:35
well lets consider what is lnflation i.e price rise due to excess money supply or less supply of goods (more demand than supply) , c does not mention that anything nor does passage mention about trainee workers or tenured workers but in e we find that workers reciving 5 $ dont find it enough to sustain life well then increase in payscale would not lead to inflation as it is not resulting in "excess money". please tell me where i am wrong
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Re: In two months, the legal minimum wage in the country of [#permalink] New post 02 Jun 2014, 08:30
Agree that C is best answer. Can we get the OA changed?

(IMO none of the choices are great, but C is the best of the bunch.)
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Re: In two months, the legal minimum wage in the country of [#permalink] New post 02 Jun 2014, 12:53
Puzzler wrote:
Agree that C is best answer. Can we get the OA changed?

(IMO none of the choices are great, but C is the best of the bunch.)


I was going to edit the above post, but I can only enter a URL on posts 6+. (This will be #6.)

My edit: Down at the bottom of the thread there is the option to link to "Similar Posts," and you can see that this same question has been listed many times. I linked to in-two-months-the-legal-minimum-wage-in-the-country-of-65039.html?fl=similar, and found OA of "C."
Re: In two months, the legal minimum wage in the country of   [#permalink] 02 Jun 2014, 12:53
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