Why Don't Wages Fall So That Everyone with the Skills

question 97

Multiple Choice

Why don't wages fall so that everyone with the skills and desire gets a job?

• A) The government might prevent it, through minimum-wage legislation.
• B) Labor unions might prevent it, through bargaining backed by the threat to strike.
• C) Firms themselves might prevent it, by voluntarily choosing to pay higher wages than necessary.
• D) All of these are reasons why wages may not fall to equilibrium.

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Definitions:

Pluralist

Pluralism is a concept that suggests a diverse, multicultural society where multiple groups maintain their distinctive cultural identities while coexisting with one another, often in a democratic framework.

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A group or class of people considered to be superior in status, power, ability, or wealth in a society or organization.

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A group of theories arguing that the balance of power among classes and groups determines the outcome of their interactions, including policy decisions.

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