Studies show that a 10 percent increase in the minimum wage a. increases teenage employment by about 10 to 15 percent b. increases teenage employment by about 1 to 3 percent c. decreases teenage employment by about 10 to 15 percent d. decreases teenage employment by about 1 to 3 percent
Real Tutor Solution
Answer
Solution
Reviewed and approved by the UpStudy tutoring team
Bonus Knowledge
Research in labor economics indicates that a 10 percent increase in the minimum wage tends to decrease teenage employment by about 1 to 3 percent. This phenomenon occurs because higher wages can lead to employers hiring fewer workers or pushing teenagers to compete for fewer job openings as businesses adjust to increased labor costs. In real-world application, while increasing the minimum wage aims to lift incomes, it’s important to consider the potential impacts on youth employment. For instance, fast-food chains might streamline their workforce or invest in automation, reducing the number of entry-level positions available for teenagers. Understanding these dynamics can be crucial for policymakers and stakeholders alike!