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

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Director
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Schools: Stanford, Chicago Booth, Babson College
In two months, the legal minimum wage in the country of [#permalink]

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31 Jan 2007, 06:53
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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 Kirfandic 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 Kirlandiaâ€™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.
SVP
Joined: 08 Nov 2006
Posts: 1554
Location: Ann Arbor
Schools: Ross '10

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31 Jan 2007, 10:19
Quote:
D. The greatest growth in Kirlandiaâ€™s economy in recent years has been in
those sectors where workers earn wages that tend to be much higher
than the minimum wage.

According to D, increased minumum wages can possibly stimulate stronger economic growth.

I will go with D.
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Director
Joined: 28 Dec 2005
Posts: 919

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31 Jan 2007, 10:56
Hmm, I will go with C. Thats the only one which shows a direct reason why wages would be affected
VP
Joined: 22 Oct 2006
Posts: 1438
Schools: Chicago Booth '11

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31 Jan 2007, 14:07
i go with C, its the classic argument against minimum wage, if you increase the minimum wage, you have to increase everyone elses salary above them
Senior Manager
Joined: 04 Nov 2006
Posts: 259
Location: California

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31 Jan 2007, 14:33
I will go with C too.. if there are many people near min wages, and if min wages increases, so businesses will have to increase the pays in view this increase...
Senior Manager
Joined: 17 Aug 2005
Posts: 388
Location: Boston, MA

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31 Jan 2007, 19:38
I like C best. But...

what's wrong with B? Is it "some...."?
Director
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Schools: Stanford, Chicago Booth, Babson College

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01 Feb 2007, 03:24
buckkitty wrote:
I like C best. But...

what's wrong with B? Is it "some...."?

Even I chose C. But B is the OA.
Director
Joined: 28 Dec 2005
Posts: 919

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01 Feb 2007, 03:30
There is one other person who says the OA he has is C.

http://www.gmatclub.com/phpbb/viewtopic ... ge+country

I do not agree with B. If they were paying lesser than minimum wage before, there is no reason they will stop now.
01 Feb 2007, 03:30
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