Minimum Wage I

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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.

It can be inferred from the passage that, if two similar fast-food restaurants in different markets have different staffing levels, then

Review: Minimum Wage I


Explanation

This question asks us about something that is somewhat divergent from the example of the fast-food store in the passage, which focuses on a single store before and after a minimum wage hike. But the answer to this question will come from the passage, and the primary point made about fast-food restaurants is that their staffing is optimized. There is a secondary point, which is that "more specific calculations" can be made about how staffing adjustments would impact bottom line. Evaluating the answer choices for consistency with these points, we determine that (A) is out, as it directly contradicts the main idea of the passage. Choice (B) is in line with the idea that they are optimized, so we'll keep it in for now. Choice (C) contradicts the passage, which argues that staffing decisions are largely made based on operational need, not salary; therefore, there is no reason to believe (C), so it's out. (D) sounds somewhat like the "more specific calculation" in the passage, so we can come back to it. Choice (E) is too strong; the author does allow for the possibility that operations could differ at successful fast-food locations. That leaves us with choices (B) and (D). Choice (D) makes a stronger claim, because it says that something "more than compensates" for something else. If this statement were true, one of the locations would be better optimized than the other, so it's contrary to the optimization idea--and, regardless, we don't know enough about these restaurants to make that kind of claim. We confirm that (B) expresses the idea that the locations are optimized.

The correct answer is (B).


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