Question

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Read these two scenarios, and then answer the question that follows.

Scenario 1
Karissa has been working at her job in retail for three years. She’s looking forward to the raise she’ll be getting next month when the minimum wage goes up by $0.50. She plans to use some of the extra money to pay her bills and save the rest.

Scenario 2
Marta has owned her popular clothing store for 10 years. She prides herself on offering good service to all her customers. To achieve this level of service, she has always had five employees work in the store every day. She will have to increase the hourly wage she pays her employees next month when the minimum wage goes up. She is concerned about how she will come up with the extra money to pay her employees. She’s trying to decide between two options: increasing the prices she charges for items and reducing the number of employees working in the store each day.

How do Karissa and Marta differ in their reactions to the increase in the minimum wage?

Answer 1

Karissa is happy about the wage increase because she will be able to save some money.

On the other hand, Martha is concerned because she will need to choose between increasing the prices of her products or reducing the number of employees to make up for the increase in the minimum wage.

Step-by-step explanation:

Martha and Karissa are on different sides of the coin, so to speak. As an employee, Karissa is happy because the money she makes will increase. She is excited about having some extra money to save up. However, Martha is an employer, which means she is the one who will actually have to pay the increase. She does not have that extra money, so she will have to come up with solutions in order to do it. She will either charge more for her items at the store or fire someone.