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OG-17 In Stenland, many workers have been complaining that

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OG-17 In Stenland, many workers have been complaining that [#permalink]

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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.
[Reveal] Spoiler: OA

Last edited by JarvisR on 28 Jun 2016, 07:56, edited 1 time in total.
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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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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.



Employers say that they will not be able to afford to employ as many employees as they today if there is an increase in min. wages. In order to strengthen the claim that raising minimum wages will not have have the effects that employers predict, we have to find a statement that says due to some reason employers will not be able to let go of employees even after minimum wages increase.

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.

Option A says it is not in the best interest of employers to let go of employees on minimum wage if the minimum wage increases, as it will be costly to find and retrain employees.

My answer is A.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 17 Jun 2016, 12:48
We have to strengthen the claim that raising minimum wages does not lead to an increase in unemployment.

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. - Correct. If the difficulty of finding and retaining employees whose wages are below a living wage leads to an expense that is similar to expense resulting from the increase in wages then the employer will be able to afford the increase in minimum wage. So employees are not removed by the employer.

B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits. - Incorrect - Out of context

C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced. - Incorrect - Out of context

D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases. - Incorrect - This will lead to an increase in unemployment.

E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum. - Incorrect - Out of context.

Answer: A

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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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.


Employer's statement- Unemployment will increase because they will no longer be able to afford
to employ as many workers.

We have to find out that employer's prediction is not true. That means employment will not decrease or that employer can afford the employment.

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.
It says that cost to maintain the employees at current wage = cost after raising wages.

If cost remains the same, then employee can afford it as there is no additional burden. Correct answer.


B) Raising the minimum wage does not also increase the amount
employers have to contribute in employee benefits.
Well, that's a good thing for an employer. But raising the wage will increase financial burden, leading to unemploymnet? No answer
C) When inflation is taken into account, the proposed new minimum
wage is not high as the current one was when it was introduced.
Inflation is not talked about in the argument.
D) Many employees currently being paid wages at the level of the
proposed new minimum wage will demand significant wage
increases.
So will unemployement increase or decrease? No answer
E) Many employers who pay some workers only the minimum wage
also pay other workers wages that are much higher than the
minimum. Good for employees, but it still doesn't address our concern.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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(E) suggests that Employers can afford to increase the minimum wage, by adjusting wages of workers who are paid much higher than minimum now. So, there won't be unemployment because the min wage is raised.
So, I thought it was E.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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vikram.karthick@gmail.com wrote:
(E) suggests that Employers can afford to increase the minimum wage, by adjusting wages of workers who are paid much higher than minimum now. So, there won't be unemployment because the min wage is raised.
So, I thought it was E.


Between A and E. The former directly states that costs will increase if employeers don't raise minimum wage. E says that employeers can pay more than minimum wage but "more" doesn't mean "more than workers need". So A is better
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OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 19 Sep 2016, 20:31
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?

Type- Strengthen
Boil it down - Employers argue that if minimum wage is increased , unemployment will increase
Goal - Support the claim 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.
There is no incentive to find cheaper workers as the total cost of employment will remain same . Correct

B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits. No employee benefits is good for employer but still the employer has to pay extra wage . 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. Out of scope

D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases. Irrelevant

E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum. Irrelevant - a few of the other workers may have a different skill set or experience . This statement does not help us in any way .

Answer A
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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 09 Oct 2016, 12:47
The reasoning in Option A is sound but the question talks about minimum wage while Option A talks about living wage. Is this discrepancy to be ignored?

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 10 Oct 2016, 00:39
Hi chetan2u,
My inference from the question was that we should have a choice which states that the number of employees can't decrease. Because if there is any possibility that the number of employees currently working is more than the number required, employers may fire extra people, thus increasing unemployment. Although there was no such choice.

But in choice A, it says that finding new people will take as much amount out of their pocket as raising minimum wage. But what if they can just fire some employees and they don't need to find new people.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 10 Oct 2016, 06:56
Navinder wrote:
Hi chetan2u,
My inference from the question was that we should have a choice which states that the number of employees can't decrease. Because if there is any possibility that the number of employees currently working is more than the number required, employers may fire extra people, thus increasing unemployment. Although there was no such choice.

But in choice A, it says that finding new people will take as much amount out of their pocket as raising minimum wage. But what if they can just fire some employees and they don't need to find new people.

Thanks


Hi,
The question talks of not only new BUT also RETAINING employees....
So it is OK on that front...

Yes I do find " wages below living wage" slightly uncomfortable as it weakens the reasoning..
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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 21 Oct 2016, 05:18
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.


Hi,

the logical chain is as follows: MORE min wage -\-> MORE employees fired --> More Unemployment
- so we need to show that spending money of raising the min wage will have no effect on the employement rate.
- comment: if I claim that x->y and show that X happend and Y didn't - this will weaken the relationship.

Option A says:
- even if the company will not fire those employees, it will spend the same amount of money.
- so we have a case in which the company might not spend money on raising the min wage, but its profitability will still might get hurt.
- This weakens the statment that spesifically raising the min wage will cause to fire more employees.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 08 Jan 2017, 06:04
Thanks vyshak for the detailed explanation..

Vyshak wrote:
We have to strengthen the claim that raising minimum wages does not lead to an increase in unemployment.

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. - Correct. If the difficulty of finding and retaining employees whose wages are below a living wage leads to an expense that is similar to expense resulting from the increase in wages then the employer will be able to afford the increase in minimum wage. So employees are not removed by the employer.

B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits. - Incorrect - Out of context

C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced. - Incorrect - Out of context

D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases. - Incorrect - This will lead to an increase in unemployment.

E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum. - Incorrect - Out of context.

Answer: A

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 10 Jan 2017, 08:09
Ideally A should be irrelevant as it talks about wages below living wages. That is not possible as companies are not allowed to to pay that low. So I'll go with E. Employer can reduce the wages of a few employees in the high income category and use the money to pay the employees even after increase in minimum wages without having to fire anyone. That was unemployment wont increase as well. So E.

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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 17 Jan 2017, 16:25
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.

correct choice as it states that the cost of finding new worker and other expenses also add to the burden of employers,so the chice is weakening the employers argument

B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.

out of 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.
Out of scope
D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases.
supports the empoyeers point
E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum.
the discussion is about the lowest payment and not the highest.

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OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 13 Aug 2017, 23:02
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?
Crux of the Question -- Raising the minimum wage will not lead to increase in unemployment.

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.
The difficulty of finding and retaining employees adds as much to employment costs as raising the minimum wage so it supports the conclusion that raising the minimum wage there will not have the effects that the employers predict.

B) Raising the minimum wage does not also increase the amount employers have to contribute in employee benefits.
As per the argument, Raising the minimum wage --> Increase in Unemployment.
Are we really concerned with what else will simultaneously increase/decrease with the increase of minimum wage?? :?: :?: As per the argument we just know that raising the minimum wage will lead to an increase in unemployment. Raise in Minimum wage itself is causing employers to say that they will no longer be able to afford to employ as many workers. Anything in addition/extra thus, does not really matter.

Even if the amount employers have to contribute in employee benefits increases, it worsens the scenario. It acts as an addon to the problem of unemployment which is mentioned in the argument. Analogy, if I cannot afford a 5$ lead pencil, knowing that along with the purchase of a 5$ pencil, I do not need to pay for 2$ lead for after usage, makes the argument stand as it is.

The other case, if the amount employers have to contribute in employee benefits does not increase the amount employers have to contribute in employee benefits - it means the amount could be same or it decrease. But knowing this information does really matter?? No, Right? Because anyways, the minimum wage is still increased, so the argument stands as it is.

C) When inflation is taken into account, the proposed new minimum wage is not high as the current one was when it was introduced.
Okay.. But so what? Do we really need to take inflation into account? Is the argument concerned about inflation?? Argument is just concerned with the fact that minimum wage would be increased, and whether after considering any other factor makes that cost seem less, that does not really matter because anyways, as a whole, the minimum wage is still increased, so the argument stands as it is.

D) Many employees currently being paid wages at the level of the proposed new minimum wage will demand significant wage increases.
so what? are we concerned with those employees, who are currently being paid wages at the level of the proposed new minimum wage, and their demands.. No, right? So, irrelevant.

ALso, just demanding does not mean that their demands will be fulfilled. So, it adds nothing to the existing stimulus.

E) Many employers who pay some workers only the minimum wage also pay other workers wages that are much higher than the minimum.
Definitely that's true. But we are not concerned with those workers. Our argument is basically concerned with increase in minimum wage. Not with the proportion of wages compared with the minimum paid workers. So, irrelevant.

Options D and E are totally irrelevant and could be quickly eliminated.
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Re: OG-17 In Stenland, many workers have been complaining that [#permalink]

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New post 14 Aug 2017, 22:16
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.


A is the best ...it compares the effect of raising wage and effect of keeping it same . further ,it points that raising wage will not add any extra burden on employers....

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Re: OG-17 In Stenland, many workers have been complaining that   [#permalink] 14 Aug 2017, 22:16
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