Jahanzeb3313 wrote:
In Stenland, many workers have been complaining that they cannot survive on minimum wage, the lowest wage an employer is permitted to pay. The government is proposing to raise the minimum wage. Many employers who pay their workers the current minimum wage argue that if it is raised, unemployment will increase because they will no longer be able to afford to employ as many workers.
Which of the following, if true in Stenland, most strongly supports the claim that raising the minimum wage there will not have the effects that the employers predict?
(A) For any position with wages below a living wage, the difficulty of finding and retaining employees adds as much to employment costs as would raising wages.
(B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.
(C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced.
(D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases.
(E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum.
Argument Construction:
Workers complain about not able to survive on existing min wage.
Govt plans to inc min wage
Employers Protest saying if min wage inc , they cant afford many employee
So they conclude that inc in min wage would eventually inc unemployment.
Govt says no effect on unemp after inc the min wage to be paid for employee
there are essentially two conclusions in the argument, one presented by employers and one stated by Govt.
Assumption made by employers while concluding their argument:
The proportion of employees (min wage workers.) that they employee are high. ( because the wage in is only for min wage workers)
The cost to the company for paying the increased wages would increase significantly such that costs would outweigh their budgets for employing the workers.
Govt while drawing this conclusion must have taken certain factors( assumption) into consideration.
1.if you remove workers from the job that would impact you negatively more than increasing the wages.
Option A essentially says:
Even if you were to fire and hire new workers whom you wished to pay below that proposed min wage, it would turn out to be much difficult and cost of that( find the employee, induction cost, and all while loss due to unavailability of same during the period) would be much more or equal to that of raising wages for current employee.
So A actually strengthens Govt Position.
(B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.
Emp Cost = wage + emp benfits
Option B essentially says the other component ( emp benfits) are not inc, but still the argument made by Employeers hold that inc in Wage would inc the employement cost , hence would have to let go many of them .
So, B is still in favor of Employers.
Hence B is incorrect.(C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced.
So lets roll back to time when current min wage was imposed. At that time min wage implemented was high taking inflation into account. So Worker were already being paid little high considering the inflation then.
Today when we are to increase the min wage ( which was already high since last time it went to effect) could actually do more harm than good for employment.
So C is incorrect(D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases.
Lets say current min wage/hr is 30$
Proposed min wage is 45$
So D talks about Group of workers who's current wage is 45$/hr, will demand increase in wage. (Yes they sound Justified enough for asking the inc in wages) More money then employers have to bear.
Hence D is incorrect(E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum.
Now Lets take a scenario
No of Employees paid min wage 30
No Employees Paid greater than min 20
So if we increase minimum wage, then this effect would be for 60% employees of the company. Definitely costs will rise.
So E is incorrect _________________
Probus
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