Why Is Raising the Minimum Wage Generally Ineffective

question 14

Multiple Choice

Why is raising the minimum wage generally ineffective?

• A) Most employers purchase labor on the black market,where the binding price floor is not present.
• B) The minimum wage is an amount suggested by the government,and employers are under no obligation to pay their employees the suggested basic wage.
• C) The minimum wage is usually set below the prevailing equilibrium wage and is frequently nonbinding.
• D) Employees are often unconcerned with their wages and care more about the benefits that come with the job.
• E) Most employees who hold low-wage jobs work in the black market,where the binding price floor doesn't exist.