Question

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.

Answer 1

Answer: Option "(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." more strongly supports the claim that raising the minimum wage there will not have the effects predicted by employers

Explanation: This option states that the cost of keeping employees in the current salary is equal to the cost of raising wages because it means that the cost of keeping employees in the current salary must take into account the cost of finding and maintaining workers who They want to work for such a low salary.

Then increasing the minimum wage will increase the amount that the employer spends on wages but will decrease the cost of finding and maintaining workers, therefore raising the minimum wage will not have an effect on the final result of the employer.