Editorial: In Ledland, unemployed adults receive government (2)

Question

Editorial: In Ledland, unemployed adults receive government assistance. To reduce unemployment, the government proposes to supplement the income of those who accept jobs that pay less than government assistance, thus enabling employers to hire workers cheaply. However, the supplement will not raise any worker's income above what government assistance would provide if he or she were not gainfully employed. Therefore, unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement.

Which of the following, if true about Ledland, most seriously weakens the argument of the editorial?

(A) The government collects no taxes on assistance it provides to unemployed individuals and their families.

(B) Neighboring countries with laws that mandate the minimum wage an employer must pay an employee have higher unemployment rates than Ledland currently has.

(C) At any given time, people who are currently employed have the best chance of being offered a job that will give them an income significantly greater than government assistance would give them.

(D) The financial assistance that the government provides to people who have no other income is less than the average starting wage.

(E) People sometimes choose a job for reasons that have nothing to do with the financial benefits it offers.

Same passage with different stem question: LINK

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I faced this question in GMATPrep Exam 3, but the answer choices were quite different from what stated here.
Attached is image for reference.
Needless to say, I got it wrong

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Official Answer

C

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LedlandUnemployed.jpg

HaileyCusimano · Accepted Answer

In this argument, we draw the conclusion that "unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement" basically because according to the argument - the incentive would be a wash - as it would make up for any amount below unemployment - but nothing beyond that point. So, individuals wouldn't be financially incentivized to take on jobs that would (after the supplement) pay the same amount as unemployment.

Answer choice  (C)  gives us a reason the incentive may be helpful despite this - as it would allow individuals to take on lower-paying jobs in hopes of advancing to higher paying jobs, without risking taking on a job that pays below the unemployment level. So, despite not bringing the individuals to a higher pay level than unemployment - it puts them in a position to obtain a higher paying job without the disadvantage of a lower-than-unemployment job in the meantime. This provides a financial incentive to said individuals.

Answer choice  (D)  on the other hand, doesn't matter to us, since it is irrelevant to those who would earn above the unemployment assistance level, and for those who earn below that level - it is a wash (as mentioned above). So, it doesn't weaken the conclusion that "unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement" - since to do so, we need a reason unemployed people might have some financial incentive to accept jobs that would entitle them to the supplement.  (C)  gives this to us, while  (D)  does not.

I hope this helps!

fmik7894 · Answer

GMATNinja

Please review my reasoning for eliminating option D:

Let's assign numbers to the scenario mentioned in the argument:

1. Current income of unemployed adults: $0
2. Government assistance provided to unemployed adults: $100
3. Salary of Jobs below the government supplement: $60
5. New Government assistance: $40

Option D : The financial assistance that the government provides ($40) to people who have no other income is less than the average starting wage ($60).

SO WHAT ? The sum total of what the unemployed people get under the new scheme is still $100. It strengthens the conclusion of the argument that THERE IS NO FINANCIAL INCENTIVE BECAUSE THE PEOPLE STILL GET $100 in total

Hence, we can eliminate option D

aceGMAT21 · Answer

the conclusion  -- unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement.

(D) The financial assistance that the government provides to people who have no other income is less than the average starting wage.
  
As per my understanding, option D also weakens somewhat, but C is the better one. As we are looking for the best option out of the five. My reasoning for option D,

If the government provides financial assistance which is less than the average starting wage to people with no other source of income, then such people would be more interested in doing the job rather than relying on the financial assistance itself. Also, if you notice carefully, the conclusion is about the UNEMPLOYED PEOPLE but we do not know whether they have some other source of income or not. Unemployment does not mean that THEY WILL definitely does not have the other sources of INCOME AS WELL. So, if the unemployed people are not having the other sources of income as well, then the conclusion is strongly weakened. But if the unemployed people are having some other sources of income, then the starting wage may not seem lucrative to such people even if it is more than the financial assistance. So, option C is the clear winner.

GMATNinja , can you please review my reasoning for option D, the one mentioned in the GMATPrep snapshot just above my post and not the one in the existing post on the GMATClub.

Thanks.
-aceGMAT21.

BrentGMATPrepNow · Answer

Argument summary: 
Premise: Unemployed adults receive X dollars from the government
Premise: If you get a low-paying job, the government tops up your pay to X dollars
Conclusion: Since people get paid X dollars in both scenarios, unemployed people have no incentive to accept low-paying jobs.
Our goal is to weaken this conclusion.

(A) The government collects no taxes on assistance it provides to unemployed individuals and their families.
This actually strengthens the conclusion. 
Unemployed people who receive X dollars from the government pay zero taxes
People in low-paying jobs still receive a total of X dollars, BUT they may have to pay taxes on their income
Given this situation, people pay fewer taxes if they're unemployed. 
ELIMINATE A

(B) Neighboring countries with laws that mandate the minimum wage an employer must pay an employee have higher unemployment rates than Ledland currently has.
What occurs in neighboring countries has no bearing on what occurs in Ledland
ELIMINATE B

(C) At any given time, people who are currently employed have the best chance of being offered a job that will give them an income significantly greater than government assistance would give them.
Aha!
So, having a job (albeit low-paying) increases your chances of securing a high-paying job. 
So, unemployed people have an incentive to accept low-paying jobs
KEEP C

(D) The financial assistance that the government provides to people who have no other income is less than the average starting wage.
Irrelevant. All that matters here is that people receive a total of X dollars can both situations. 
ELIMINATE D

(E) People sometimes choose a job for reasons that have nothing to do with the financial benefits it offers.
There's no mention here about choosing jobs that are  low-paying  (the main point in the entire argument)
ELIMINATE E

Answer: C

Cheers,
Brent

svasan05 · Answer

Hi

Let me try to address your query.

The passage states that the unemployed in Ledland receive assistance from the government (let's call this amount X). We can infer that this could potentially increase costs for companies hiring employees since they would have to offer at least X as pay, else why would anyone take the job?

Now, the government proposes to pay an additional amount to those who accept jobs that pay less than X. Now companies can hire employees for less than X, since the disincentive to accept such jobs is no longer there (or at least, reduced) for the prospective employees - even if they accept a job paying less than X, the government would top that up with an additional amount.

Now, the sentence you have highlighted states:  However, the supplement will not raise any worker's income above what government assistance would provide if he or she were not gainfully employed.

Let's say the government proposes to give an additional amount Y for such employees. And an employee takes up a job offer paying Z < X. This sentence states that if Z+Y>X, then the additional government payment to such an employee will be reduced to a level that will enable the employee to be paid X ( = Z + amount from government). Therefore, an employee will have no financial incentive to only accept jobs that pay <X.

Hope this helps.

lakshya14 · Answer

We are talking about unemployed people, but in (C) it talks about employed people?

svasan05 · Answer

Hi Lakshya

Option (C) does indeed talk about unemployed people, albeit in an indirect way.

It states: At any given time, people who are currently employed have the best chance of being offered a job that will give them an income significantly greater than government assistance would give them.

If we make the reasonable assumption that all people are either employed or unemployed, with no third category available, then if something is applicable only to one set automatically becomes unavailable to the other set. From this option, we can infer that unemployed people have a  worse chance  of being offered a job that pays above government assistance than employed people.

Now, the conclusion states: Unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement.

But by taking up such a job, unemployed people will then become employed, which improves their chances of getting a pay greater than government assistance (since their current pay would be equivalent to government assistance at best), which is a financial incentive. Thus it weakens the argument.

Hope this clarifies.

egmat · Answer

Hello  zoezhuyan ,

Let us suppose the government assistance is 100$. Gainfully employed here means having a job that pays more than 100$. So, if one is not gainfully employed, s/he receives less than 100$ as wage. Let us take an example of 80$ as this wage. The government will supplement this amount to make a total of 100$, which is the assistance given to the unemployed. So, the government supplements them with 20$.

But this supplement cannot take the total income to an amount greater than the assistance to the unemployed. That is, one will not get a total amount of 110$ as a sum of lower-than-assistance wage and governmental supplement no matter what. The only way to earn above that by a job is to be gainfully employed. That is what the given statement tells you. In other words,

If one did not already get more than the assistance, the supplement wouldn't take them to that position.

This is a premise in the given argument.

egmat · Answer

Passage Analysis

Editorial: In Ledland, unemployed adults receive government assistance. 
 The editorial says unemployed adults receive an amount as government assistance in Ledland.

To reduce unemployment, the government proposes to supplement the income of those who accept jobs that pay less than government assistance, thus enabling employers to hire workers cheaply. 
 With the intention of reducing unemployment, the government proposed a scheme. 
According to this scheme, for those people who work for a pay that is less than the government assistance, the government will provide a supplemental pay to make the total pay equal to the government assistance. 
This allows employers to hire workers cheaply.

However, the supplement will not raise any worker's income above what government assistance would provide if he or she were not gainfully employed. 
 But this supplement will not raise any worker’s income above the amount paid as government assistance to unemployed people.

Therefore, unemployed people will have no financial incentive to accept jobs that would entitle them to the supplement. 
 Thus, the conclusion is that unemployed people will not have any financial incentive to accept such jobs which will get them a supplement.

Question Stem Analysis

Which of the following, if true about Ledland, most seriously weakens the argument of the editorial? 
 
This is a typical weakener question. Which statement, if true, most weakens the argument?

Prethinking  
 
Weakener Framework

What new information will decrease one’s confidence in the conclusion that unemployed people will not have any financial incentive to accept such jobs which will get them a supplement the most? 
Given that 
  In Ledland, unemployed adults receive government assistance.  
 To reduce unemployment, the government proposes to supplement the income of those who accept jobs that pay less than government assistance.  
 The supplement will not raise any worker's income above what government assistance would provide if he or she were not gainfully employed.

Weakener 1- The supplement allows unemployed people to gain work experience with a minimum payment equal to governmental assistance, which will later fetch them higher-paying jobs 
Weakener 2- The employers provide other incentives such as food and stay for those employed effectively making the total financial savings more than in the case of government assistance.

Answer Choice Analysis

(A) The government collects no taxes on assistance it provides to unemployed individuals and their families. 
INCORRECT 
 This does not provide a reason for unemployed adults who get government assistance to engage in labor. Hence this is not the right answer.

(B) Neighboring countries with laws that mandate the minimum wage an employer must pay an employee have higher unemployment rates than Ledland currently has. 
INCORRECT 
 Whether neighboring countries have a higher or lower unemployment rate is not relevant to the argument as the conclusion is not about the success of the plan in reducing unemployment. It is about the financial incentive for unemployed people. Hence this is an incorrect answer.

(C) At any given time, people who are currently employed have the best chance of being offered a job that will give them an income significantly greater than government assistance would give them. 
 CORRECT  
 This option is in line with our first weakener. It gives a financial reason for people to go for work even if it will not pay more than financial assistance by the government at present. Hence this is the correct answer.

(D)The financial assistance that the government provides to people who have no other income is less than the average starting wage. 
INCORRECT 
 Suppose the governmental assistance for people with no income is 100$. Say, the average starting wage is 120$. This could mean that there are people who get 80$, 100$, or 140$ but the average starting wage is 120$. 
For those who get 80$, they get a supplement of 20$. Those who gets 100$ or above gets no supplement. The conclusion is only about jobs that would entitle people to the government supplement (i.e. only about those jobs that have a wage <100$, say 80$). 
How does this provide a financial incentive to those who are currently unemployed? In any case, an unemployed person, who was getting 100$ as government support would still have no financial incentive to go for a job where he would earn 80$ and get 20$ as supplement. 
Hence, this is not the correct answer.

(E) People sometimes choose a job for reasons that have nothing to do with the financial benefits it offers. 
INCORRECT 
 This option is not relevant for the conclusion at hand. Hence this cannot be the correct answer.

Vijendra.D · Answer

KarishmaB   GMATNinja   Bunuel 
Can I eliminate option d just because government wage equal $100 and
Starting wage of person1 could be $80 or it could be $120

guddo · Answer

Answer: C

Why C weakens:
 
The editorial assumes the only financial payoff from taking one of these low paying jobs is the immediate income, which is capped at the assistance level. But if being employed greatly increases your chance of getting a much better paying job later, then taking the low paying job can still be a smart financial move as a stepping stone. So there can be a financial incentive even without an immediate income increase.

Why the others do not
 
A makes working look even less attractive (assistance untaxed), so it strengthens.
 B is about minimum wage laws in other countries, not about this supplement and incentives.
 D talks about the average starting wage, but the argument is about the specific low wage jobs that need a supplement.
 E gives a nonfinancial reason to work, but the conclusion is specifically “no financial incentive,” so it does not directly contradict it.

guddo · Answer

Yes. D only gives an average, so individual starting wages can still be below assistance.

Example: assistance = 100; starting wages = 80, 120, 140. The average is 113.33 (above 100), but one person still starts at 80. So D does not rule out low paying jobs and does not weaken the argument.

KarishmaB · Answer

Say unemployed people get $100 per month from the Govt. as assistance. 
So if some people are offered a job that pays $80 per month, they refuse to take it. After all, if they stay unemployed, they would get $100 from the Govt (more than what the job will give them) 
So to reduce unemployment, the Govt is proposing to give them an additional $20 so that they accept that job. They will then be able to make up $100 too.

So here is what the author says: These people will still get $100 only which they will anyway get without a job (if they stay unemployed). So what is the financial incentive for them to take up the job? They have no financial incentive to accept the $80 job still.

Mind you - the conclusion clearly talks about 'financial incentive' only. So any weakening that must take place must be along the lines of 'there is a financial incentive'.

(A) The government collects no taxes on assistance it provides to unemployed individuals and their families.

We do not know whether the Govt collects taxes on assistance, on employment income, on higher incomes etc. So we have no way to compare whether assistance will lead to more money because of no taxes. May be the govt collects no taxes on a salary of up to $500. We have no idea.

(B) Neighboring countries with laws that mandate the minimum wage an employer must pay an employee have higher unemployment rates than Ledland currently has.

Irrelevant. We want to reduce the current unemployment rates of Ledland.

(C) At any given time, people who are currently employed have the best chance of being offered a job that will give them an income significantly greater than government assistance would give them.
  
This gives us a financial incentive. 
People who are employed with $80 salary and $20 assistance have a great chance of getting a $200 job next year.
People who are unemployed and just taking $100 from the Govt have very little chance of getting a $200 job next year.
So the financial incentive of getting a job and taking the assistance for the rest is a much higher salary later.

(D) The financial assistance that the government provides to people who have no other income is less than the average starting wage.

This option tells us that $100 is less than the average salary which is say $150. That is irrelevant to our argument. We are discussing whether an unemployed person getting a $80 salary will take up the job if he gets $20 from the Govt. Average salary in the country could be anything - say $100,000 - because of some very high salaries. It has nothing to do with reducing unemployment. The unemployed are not being offered jobs at the average salaries. Salaries differ hugely based on industry, skill level, education etc. People don't get offered the average salary of a country. The average is just a calculated average based on what salaries are actually given in the country in the year.

(E) People sometimes choose a job for reasons that have nothing to do with the financial benefits it offers.

Irrelevant. As we said, our argument only talks about 'financial incentive'.

Answer (C)

KarishmaB · Answer

(D) is irrelevant because average wage in a country does not mean that people are offered that wage when they pick a job. 
Average is just a calculated average based on what people are given. The average could be much much higher than govt assistance - the unemployed are not getting offered that average. 
Salary offered to a person depends on many factors and average salary in the country has no role to play in it.

Editorial: In Ledland, unemployed adults receive government (2)

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Editorial: In Ledland, unemployed adults receive government (2)

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