Question

Were being paid at the federal minimum wage level or lower.

Would federal legislation to increase the minimum wage have a greater effect on the mean or the median income of all
workers? Explain your answer.
a) It would have a large effect on the median and mean. The mean and median income levels will both increase with an
b) increased federal minimum wage.
c) It would have a greater effect on the median because the mean is resistant to low values.
d) It would have a greater effect on the mean because the median is resistant to low values.
e) It would have a greater effect on the median, because the median is not resistant to a change in thousands of values.

Answer 1

The effect of increasing the federal minimum wage on the mean or the median income of all workers would depend on the distribution of wages. If a large proportion of workers are earning at or near the federal minimum wage, then increasing the minimum wage would have a greater effect on the median income. On the other hand, if there is a large income disparity among workers and a small proportion of workers are earning the minimum wage, then increasing the minimum wage would have a greater effect on the mean income.

Step-by-step explanation:

The effect of increasing the federal minimum wage on the mean or the median income of all workers would depend on the distribution of wages.

If a large proportion of workers are earning at or near the federal minimum wage, then increasing the minimum wage would have a greater effect on the median income. This is because the median is the middle value in a data set, so increasing wages for lower-paid workers would have a larger impact on the median.

On the other hand, if there is a large income disparity among workers and a small proportion of workers are earning the minimum wage, then increasing the minimum wage would have a greater effect on the mean income. This is because the mean is sensitive to extreme values and would be influenced by the increase in wages for the lower-paid workers.