In Stenland, many workers have been complaining that they cannot survive on minimum wage, the lowest wage an employer is...
GMAT Critical Reasoning : (CR) Questions
In Stenland, many workers have been complaining that they cannot survive on minimum wage, the lowest wage an employer is permitted to pay. The government is proposing to raise the minimum wage. Many employers who pay their workers the current minimum wage argue that if it is raised, unemployment will increase because they will no longer be able to afford to employ as many workers.
Which of the following, if true in Stenland, most strongly supports the claim that raising the minimum wage there will not have the effects that the employers predict?
Passage Analysis:
| Text from Passage | Analysis |
| In Stenland, many workers have been complaining that they cannot survive on minimum wage, the lowest wage an employer is permitted to pay. |
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| The government is proposing to raise the minimum wage. |
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| Many employers who pay their workers the current minimum wage argue that if it is raised, unemployment will increase because they will no longer be able to afford to employ as many workers. |
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Argument Flow:
The passage presents a classic economic debate by first establishing the workers' problem (can't survive on current wages), then the government's proposed solution (raise minimum wage), and finally the employers' opposition (predicting job losses). This creates a three-way tension between workers, government, and employers.
Main Conclusion:
There is no explicit conclusion in this passage - it's setting up a debate. The passage presents competing claims: workers need higher wages, government proposes raising minimum wage, and employers predict this will cause unemployment.
Logical Structure:
This isn't a traditional argument with premises leading to a conclusion. Instead, it's a setup passage that presents conflicting positions. The structure is: Problem (workers can't survive) → Proposed Solution (raise minimum wage) → Predicted Consequence (unemployment will increase). The question asks us to find evidence that would undermine the employers' prediction.
Prethinking:
Question type:
Strengthen - We need to find information that would make us believe the employers' prediction about unemployment is wrong
Precision of Claims
The employers' claim is very specific: raising minimum wage will increase unemployment because they won't be able to afford as many workers. We need to target this exact causal chain
Strategy
Think about scenarios where raising minimum wage wouldn't lead to the job losses that employers predict. We can attack their reasoning by showing situations where employers could still afford the same number of workers, or where other factors would prevent unemployment from rising
This choice tells us that for jobs paying below a living wage, the difficulty of finding and keeping workers adds as much to employment costs as raising wages would. This is powerful because it shows that employers are already paying these hidden costs through high turnover, constant recruitment, and retraining. If they paid higher wages, these turnover costs would decrease, keeping total employment costs roughly the same. Since total costs wouldn't actually increase, employers could maintain their current workforce size, contradicting their prediction of unemployment. This directly strengthens the claim against the employers' prediction.
This tells us that raising minimum wage doesn't increase what employers contribute to employee benefits. While this might seem helpful by suggesting costs won't rise as much as expected, it doesn't address the core issue. Even if benefit costs stay the same, the employers' concern is about the direct wage increase itself. This choice doesn't provide strong enough evidence that employment levels would remain stable - it just says one cost component won't increase alongside wages.
This indicates that when we account for inflation, the proposed minimum wage isn't as high as the original minimum wage was when first introduced. This suggests the increase might be modest in real terms, but it doesn't directly address whether employers can afford to maintain their workforce. Even a relatively small increase could still force employers to reduce staff if their budgets are tight. This doesn't strongly counter the unemployment prediction.
This tells us that workers currently earning at the level of the proposed new minimum wage will demand significant increases. This actually makes things worse for employers by suggesting that wage costs could spiral upward beyond just the minimum wage increase. If anything, this supports rather than contradicts the employers' concerns about affordability and potential job losses.
This reveals that many employers already pay some workers much more than minimum wage while paying others only the minimum. This shows employers have varying wage structures, but doesn't tell us anything about their ability to absorb higher minimum wage costs. Knowing they pay some workers more doesn't indicate they can afford to pay minimum wage workers more without reducing employment levels.