Which of the following is a consequence of minimum wage laws?
A)Low skilled workers benefit because minimum wage increases the number of jobs providing low skilled workers with training.
B)Employers will be reluctant to offer low-skill workers jobs with training.
C)Producers have an incentive to offer workers non-wage benefits such as health care benefits and convenient working hours rather than a higher wage.
D)All workers benefit when the minimum wage is increased.

Question

Quizplus · Accepted Answer

The minimum wage law creates a price floor for the wage rate that employers must pay to workers. This means that if the minimum wage is set above the equilibrium wage rate (the wage rate that would prevail in the absence of the law), some low-skilled workers who would have been hired at the equilibrium wage rate will become unemployed. Hence, employers will be reluctant to offer low-skill workers jobs with training and may choose to automate jobs, hire workers from other countries who accept lower wages or even eliminate the job altogether.

Which of the Following Is a Consequence of Minimum Wage