Final answer:
With an elasticity of -0.2, a 30% increase in the minimum wage would typically result in a 6% reduction in demand for low-skilled labor, but actual impacts may vary.
Step-by-step explanation:
If the elasticity of demand for low-skilled labor is -0.2, then a 30% increase in the minimum wage would likely lead to a decrease in the quantity demanded of low-skilled labor. Given the elasticity, we would expect a 6% decrease in demand (0.2 elasticity multiplied by the 30% increase in wage). However, several studies suggest that the reduction in employment might not be significant, and in some cases, there might be no effect at all. Nonetheless, economists like Walter Williams and Thomas Sowell argue that higher minimum wages could increase employment barriers for lower-skilled workers and potentially reduce their opportunities to gain experience.