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# In Stenland, many workers have been complaining that they cannot survi

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Joined: 15 Nov 2016
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Re: In Stenland, many workers have been complaining that they cannot survi  [#permalink]

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14 Apr 2018, 00:58
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.

This is a strengthen the argument question.
Like weaken, strengthen questions also require us to isolate the conclusion. As we will be looking for the answer that makes our belief stronger on the premise-conclusion relationship such as analogies, survey, reports, statistical data etc.
Protect the missing information
a) by keeping any option that fills the gap
b) by eliminating the answer that attacks the missing information

Conclusion: "Unemployment will increase because ERs will no longer be able to afford to employ as many workers." We have to prove the opposite of it, which is "Unemployment will NOT increase because ERs WILL 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.
If the cost of finding and retaining EEs is same as raising wages then why would the ERs leave their current EEs. That means "Unemployment will NOT increase because ERs WILL be able to afford to employ as many workers." This is the answer.

(B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.
This option may be an assumption but doesn't strengthen the argument. Although this covers the affordability part of the conclusion but doesn't make me believe stronger that the unemployment rate will not be higher.

(C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced.
This is out of scope. We are not talking about a specific situation. Eliminate.

(D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases.
Let them do so. It doesn't help me with my conclusion. I don't know whether it will have any impact on the unemployment.

(E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum.
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Re: In Stenland, many workers have been complaining that they cannot survi  [#permalink]

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16 Apr 2018, 10:54
1
Vyshak wrote:
Because the focus of the argument is on unemployment and not on paying the minimum wages

JAIN09 wrote:
sir,as the employer is unable to pay minimum(new) wage to employees.so hiring new employees will lead the employer to pay new minimum wage
so the company will come back to square one.
from POE,only correct choice is A.but why we are considering hiring at all if the company have to pay increase minimum wage to the new workers

Posted from my mobile device

Kudos Vyshak for the replies! I'll add my two cents, too...

Quote:
(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.

Choice (A) refers to the CURRENT cost of finding and retaining employees. Let's say that an employer pays \$5 per hour and that employees need \$8 per hour to earn a "living wage." The employer might be saving money by paying \$5/hour instead of \$8/hour but, according to (A), there is another hidden cost: having to find and retain employees who are willing to work for such low pay is costly.

For example, workers would obviously prefer to work someplace that pays more. They might take the job for \$5/hour when they are desperate, but as soon as they find something a little better, they will likely quit. (A) implies that the employer will constantly have to waste time and money finding and replacing workers. According to (A), this hidden cost is the same as the cost of raising wages to \$8.

So changing the minimum wage to \$8 will increase the amount the employer spends on wages but will DECREASE the amount the employer spends finding/replacing workers. If (A) is true, then implementing the minimum wage should have no net effect on the employer's bottom line.

I hope that helps!
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Re: In Stenland, many workers have been complaining that they cannot survi  [#permalink]

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13 Jul 2018, 12:48
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
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Re: In Stenland, many workers have been complaining that they cannot survi  [#permalink]

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28 Jul 2018, 22:40
Premise:
1. workers have been complaining that they cannot survive on minimum wage
2. The government is proposing to raise the minimum wage.
3. Many employers who pay their workers the current minimum wage argue that if it is raised, unemployment will increase
4. they will no longer be able to afford to employ as many workers.

Pre-think:
Why employers said that they will not able to afford to employ as many workers. May be they have fixed spendings on employee's salary. So they could not cross it. and if they did it will reduce their revenue/profit. this means they have to fire a few employees. lets think something against all this. Well if employer will fire the employees, the company will not survive. So either way if company will fail then company will like to keep employee, As this way they have a chance to suceed.

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. --- so if firing an employee orraising wage is adding same cost to company, they will like to retain the employee.

(B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.--- out of the scope.

(C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced. --- well may be this is true, but it is still not changing the fact that employer have to retain the employees with higher wages.

(D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases. --- well they dont have to company will have to do this or fire them.

(E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum. --- i think for such companies this will not be a trouble as already they are paying higher to some and others not. now they have to increase wages for rest of the employee or fire them. but this option is not explaning why not to fire these rest of the employee.

A is best of the lot.
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Re: In Stenland, many workers have been complaining that they cannot survi &nbs [#permalink] 28 Jul 2018, 22:40

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