Minimum Wage II

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     A myth in the ongoing debate about minimum wages is that raising minimum wages will necessarily increase a country's unemployment rate. While there are cases in which a marginal increase in wage rates might impact the operations of a company dramatically enough for the company to change its operations, in most companies, the cost increases of higher wages will tend to affect a company's bottom line without altering its staffing structure. For example, if a particular fast-food location operates at a particular time window with a staff of five people, then five must be the minimum staffing level for that business to achieve optimal results. In the case of a national fast-food chain, especially, these operational questions in general will already have been optimized. Even before rates are raised, managers of these locations have asked themselves whether they can afford to cut jobs and whether they are staffed at optimal levels (in this case, five people). A more specific calculation is needed. In this example, the precise question is how a marginal increase in staffing costs would compare to the decrease in business that would result in decreasing the staff level from five to four and serving food less quickly. The results of this analysis would not necessarily be consistent across industry, or even across markets and companies within an industry.

According to the passage, which of the following statements is true of most companies?