Question

One problem with the use of minimum wage as an anti poverty measure is that minimum wage increases are

A) tend to result in lower wages of workers receiving higher pay

B) this directly increases the wages of most us workers and the cost of such widespread increase is prohibitive to firms

C) are often received my workers in households that are well above the poverty line

D) generally lower prices of goods produced by low wage workers

Answer 1

Ans:

Option B

this directly increases the wages of most us workers and the cost of such widespread increase is prohibitive to firms.

Minimum wages are the lowest wages permitted by law.The rise in the minimum wages will increase the labor cost and thus increasing the cost of production.if increase in minimum wages is used as anti poverty measure, the increase in cost is prohibitive to firms and firms react by using machines and decreasing labor employed.