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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

Ask by Mitchell Floyd. in the United States
Feb 03,2025

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Answer

A 10 percent increase in the minimum wage decreases teenage employment by about 10 to 15 percent.

Solution

To solve this problem, we need to analyze the effects of a 10 percent increase in the minimum wage on teenage employment based on the options provided. 1. **Understanding the Context**: - The question is about the impact of a minimum wage increase on teenage employment. - We have four options regarding the percentage change in teenage employment. 2. **Analyzing Each Option**: - **Option a**: Suggests a 10 to 15 percent increase in teenage employment. - **Option b**: Suggests a 1 to 3 percent increase in teenage employment. - **Option c**: Suggests a 10 to 15 percent decrease in teenage employment. - **Option d**: Suggests a 1 to 3 percent decrease in teenage employment. 3. **Research Findings**: - Economic studies generally indicate that increasing the minimum wage can lead to a decrease in employment for certain groups, particularly teenagers, due to higher labor costs for employers. - The consensus in many studies is that a significant increase in minimum wage tends to decrease employment among teenagers rather than increase it. 4. **Conclusion**: - Based on the typical findings in labor economics, the most likely answer is that a 10 percent increase in the minimum wage **decreases teenage employment**. Thus, the correct answer is: **c. decreases teenage employment by about 10 to 15 percent**.

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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!

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