pic Increases in the minimum wage will: increase unemployment among workers whos
ID: 1190919 • Letter: P
Question
pic Increases in the minimum wage will: increase unemployment among workers whose market wage is higher than the new minimum wage have a large effect on the unemployment rate in the United States increase the level of unemployment for all groups of workers increase unemployment among teenagers The unemployment rate in the United States is usually than the unemployment rates in most other high income countries, partly because the United States has requirements for the unemployed to receive government payments higher more stringent higher, less stringent lower, less sumgent lower, mote stringentExplanation / Answer
Q1. Minimum wage is associated with unskilled workers. Teenagers are generally counted as unskilled workers.
So, minimum wage is associated with them as well.
Wage rate and demand for labor have inverse relationship. Increase in wage rate results in decrease in demand for labor and decrease in wage rate results in increase in demand for labor.
So, increase in minimum wage rate will result in a decrease in demand for unskilled workers.
Being unskilled workers, demand for teenage workers will also decrease and unemployment among them will increase.
Thus, the correct answer is option (D).
Q2. Requirements with respect to receipt of unemployment benefits are much stricter in United States than in most other high-income countries.
The time period of receiving unemployment insurance in United States is much shorter than in most other high-income countries.
This induces the unemployed persons in United States to look more actively and intensely for employment opportunities otherwise they would be on their own once the time period of receiving unemployment insurance comes to an end.
On the other hand, in many high-income countries, the time period of receiving unemployment insurance is greater than in United States.
This induces unemployed persons in these countries to take their time while looking for jobs. Thus, they search jobs in more relaxed manner.
Thus, unemployed in United States due to their intense and active search get employment much earlier than unemployed in most other high-income countries.
Therefore, unemployment in United States is lower than in most other high-income countries.
Hence, the correct answer is option (D).
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