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01 Apr 2019, 10:16
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When companies’ profits would otherwise be reduced by an increase in the minimum wage (a wage rate set by the government as the lowest that companies are allowed to pay), the companies often reduce the number of workers they employ. Yet a recent increase in the minimum wage did not result in job cutbacks in the fast-food industry, where most workers are paid the minimum wage.
Which one of the following, if true, most helps to explain why the increase in the minimum wage did not affect the number of jobs in the fast-food industry?
(A) After the recent increase in the minimum wage, decreased job turnover in the fast-food industry allowed employers of fast-food workers to save enough on recruiting costs to cover the cost of the wage increase.
(B) If, in any industry, an increase in the minimum wage leads to the elimination of many jobs that pay the minimum wage, then higherpaying supervisory positions will also be eliminated in that industry.
(C) With respect to its response to increases in the minimum wage, the fast-food industry does not differ significantly from other industries that employ many workers at the minimum wage.
(D) A few employees in the fast-food industry were already earning more than the new, higher minimum wage before the new minimum wage was established.
(E) Sales of fast food to workers who are paid the minimum wage did not increase following the recent change in the minimum wage.
Which one of the following, if true, most helps to explain why the increase in the minimum wage did not affect the number of jobs in the fast-food industry?
(A) After the recent increase in the minimum wage, decreased job turnover in the fast-food industry allowed employers of fast-food workers to save enough on recruiting costs to cover the cost of the wage increase.
(B) If, in any industry, an increase in the minimum wage leads to the elimination of many jobs that pay the minimum wage, then higherpaying supervisory positions will also be eliminated in that industry.
(C) With respect to its response to increases in the minimum wage, the fast-food industry does not differ significantly from other industries that employ many workers at the minimum wage.
(D) A few employees in the fast-food industry were already earning more than the new, higher minimum wage before the new minimum wage was established.
(E) Sales of fast food to workers who are paid the minimum wage did not increase following the recent change in the minimum wage.
03 Apr 2019, 03:09
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Quote:
Question Type: Resolve the Paradox
Paraphrased Notes: Setting minimum wage leads to lower company profits. Company response is to cut jobs. But in fast-food industry, most minimum wage jobs were not cut.
As a paradox question, we are looking for an answer that would be a possible cause of the situation above or make both sides of the argument possible and/or true.
Quote:
This answer aptly adds extra pieces of information to show how minimum wage increase might not affect fast-food industry.
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This attempts to add that increase in minimum wage cuts min. wage. jobs and also cuts supervisor positions. Does not explain why minimum wages ARE NOT cut in fast-food industry. Speaks of overall industry responses.
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So what. This simply adds the fact that all high concentration of minimum wage industries have the same response. This doesn’t solve the paradox.
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Just because few employees were earning more doesn’t explain the lack of the cut. In fact, if anything, I'd assume there should be more cuts.
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“Sales of fast food” is not relevant at all.
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06 Jun 2019, 18:00
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Hi experts, can you please help with the following question. I eliminated B, C, and E easily, but then was deliberating between A and D for a while.
Option D says that "a few" employees were already making more than the new (higher) minimum wage.
So, let's assume that the old min wage was $9, then new min wage was $10 and there were 1,000 employees in fast-food industry. Unless I am terribly wrong, "a few" would mean that a considerable amount (50, 100, or even 999) of people were already making more than $10. If that is the case, and if "a few" meant 999 people, then the industry would not be required to cut jobs because anyways the employees are getting paid above the new minimum wage.
Again, I am probably stretching D too much and there is much better choice - A.
Option D says that "a few" employees were already making more than the new (higher) minimum wage.
So, let's assume that the old min wage was $9, then new min wage was $10 and there were 1,000 employees in fast-food industry. Unless I am terribly wrong, "a few" would mean that a considerable amount (50, 100, or even 999) of people were already making more than $10. If that is the case, and if "a few" meant 999 people, then the industry would not be required to cut jobs because anyways the employees are getting paid above the new minimum wage.
Again, I am probably stretching D too much and there is much better choice - A.
