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Small-business groups are lobbying to defeat proposed federal legislation that would substantially raise the federal minimum wage. This opposition is surprising since the legislation they oppose would, for the first time, exempt all small businesses from paying any minimum wage.
Which of the following, if true, would best explain the opposition of small-business groups to the proposed legislation?
This is a Resolve Paradox question type as indicated by the lack of conclusion here. The paradox we are given is:
- Small business groups are trying to get rid of a law that would increase federal minimum wage. (Well, sure, that makes sense. That means they would pay less!)
- But the law would exempt the small business from paying at all. (Wait, what? Why would you oppose it if you don’t have to pay anything at all? Hm…)
Since the stimulus articulates “small business groups”, it must be that their minimum wage might be affected by how the law affects large business groups! Let’s see what we’ve got. From a first quick scan, it looks like (B) is pretty golden. But let’s do some error analysis anyway.
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(A) Under the current federal minimum-wage law, most small businesses are required to pay no less than the minimum wage to their employees.
This answer choice discusses the current law and does not resolve the discrepancy. It only adds an additional premise.
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(B) In order to attract workers, small companies must match the wages offered by their larger competitors, and these competitors would not be exempt under the proposed laws.
Ah, this clears up the issue. If larger companies are forced to up their minimum wage AND small companies compete with them for employees, the small companies would basically also have to raise their wages! This is the correct choice. Quote:
(C) The exact number of companies that are currently required to pay no less than the minimum wage but that would be exempt under the proposed laws is unknown.
We don’t really care for the number of companies in the CURRENT state. We care about why the small businesses are opposing a law that seems beneficial to them!
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(D) Some states have set their own minimum wages—in some cases, quite a bit above the level of the minimum wage mandated by current federal law—for certain key industries.
Hm, we’re talking about some states as a whole but we want to know how this law affects small and large businesses. This doesn’t address the premises.
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(E) Service companies make up the majority of small businesses and they generally employ more employees per dollar of revenues than do retail or manufacturing businesses.
The difference between service companies and retail/manufacturing business does not clear up the discrepancy here. This answer choice brings in an irrelevant distinction. We don’t care about what type of companies make up small businesses.
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"What you do in practice determines your level of success. I used to tell my players: You have to give 100% everyday. Whatever you don't give, you can't make it up tomorrow."