Kirlandia

[arishindian]

In two months, the legal minimum wage in the country of Kirlandia will increase from five Kirlandic dollars(KD5.00) Per hour to KD5.50 per hour. Opponents of this increase have argued that the resulting rise in wages will drive the inflation rate up. In fact its impact on wages will probably be negligible, since only a very small proportion of all Kirfandic workers are currently receiving less than KD5.50 per hour.

Which of the following, if true, most seriously weakens the argument?

A. Most people in kirlandia who are currently earning the minimum wage have
been employed at their current jobs for less than a year.
B. Some firms in Kirlandia have paid workers considerably less than KD5.00
per hour, in violation of kirlandic employment regulations.
C. Many businesses hire trainees at or near the minimum wage but must
reward trained workers by keeping their paylevels above the pay level
of trainees.
D. The greatest growth in Kirlandia’s economy in recent years has been in
those sectors where workers earn wages that tend to be much higher
than the minimum wage.
E The current minimum wage is insufficient for a worker holding only one job
to earn enough to support a family ,even when working full time at that job.

Original Answer is given as B , which I disagree. Increase in wage , doesnt impact anyway, because , those firms in C will still pay the same level irrespective of legal wage change .

Can someone shed his/her knowledge ?

[mangipudi]

B is definitely not correct.

According to B., If some firms are violating the minimum wage requirement now, they will continue to violate later ( after the Minimum wage is increased to 5.5).
Furthermore, it does not explain why would firms' violation will drive inflation up ( this is what we need to weaken the argument.)

Is this a gmat prep question ?

[cesar.rodriguez.blanco]

Conclusion: "There will be no impact on wages although the minimum wage in the country will increase from 5.00 to 5.50 per hour"

Evidence: "only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour"

Assumption: The only impact of the new minimum wage will be at WAGES, but no other issue (such as cost of living, for example)

We must look for something implying that there are MANY workers who are going to be affected by the new minimum wage, that is workers that are going to be paid more.

A) Out of scope. We do not care about the time; we care if the workers are been paid the minimum wage or not
B) Out of scope. If the companies did not comply with the law before, they will not comply with the new wage either
C) Can be
D) Out of scope. We do not care about the sectors
E) Out of scope. We do not care if the minimum wage is enough or not. We only care if many people are going to be affected with the new minimum wage.

OA must be C

[RonPurewal]

Conclusion: "There will be no impact on wages although the minimum wage in the country will increase from 5.00 to 5.50 per hour"

Evidence: "only a very small proportion of all Kirlandic workers are currently receiving less than KD5.50 per hour"

Assumption: The only impact of the new minimum wage will be at WAGES, but no other issue (such as cost of living, for example)

We must look for something implying that there are MANY workers who are going to be affected by the new minimum wage, that is workers that are going to be paid more.

A) Out of scope. We do not care about the time; we care if the workers are been paid the minimum wage or not
B) Out of scope. If the companies did not comply with the law before, they will not comply with the new wage either
C) Can be
D) Out of scope. We do not care about the sectors
E) Out of scope. We do not care if the minimum wage is enough or not. We only care if many people are going to be affected with the new minimum wage.

OA must be C

well done!

yes, the correct answer to this question should definitely be (c). if this is from GMATPREP, please verify; thanks.

[tanyatomar]

yes even i got this question in GMATPrep question bag.. but i wanna confirm the answer.. i chose C... but answer mentioned was B..
if anyone knows please let me know the correct answer.

[gargeeabhishek]

Hi Ron,

Why is the answer not E?

E The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family ,even when working full time at that job.

This means many of the workers will be affected which is opposing the view that the effects are negligible.

Please explain.


Thanks,
Gargee

[jnelson0612]

yes even i got this question in GMATPrep question bag.. but i wanna confirm the answer.. i chose C... but answer mentioned was B..
if anyone knows please let me know the correct answer.

The answer is definitely C.

[jnelson0612]

Hi Ron,

Why is the answer not E?

E The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family ,even when working full time at that job.

This means many of the workers will be affected which is opposing the view that the effects are negligible.

Please explain.


Thanks,
Gargee

Hi Gargee,
That would be true if there were an infinite number of jobs that the workers could obtain. If the workers had to obtain more than one job to make ends meet, and the jobs would then magically materialize out of thin air, I would certainly agree with your conclusion.

However, there are only a certain number of jobs available at any given time. Whether more people do only one job, or fewer people do two or more jobs, the net impact of the wage increase is the same: a certain number of jobs * wage increase.

Please let us know if we can help further!

[divineacclivity]

Ron,

Could you please help understand why C is correct?
My thought over the options:

A. Most people in kirlandia who are currently earning the minimum wage have been employed at their current jobs for less than a year.
--> sounds irrelevant
B. Some firms in Kirlandia have paid workers considerably less than KD5.00 per hour, in violation of kirlandic employment regulations.
--> Sunch firms might still violate the regulations, so, not imp
C. Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.
--> fixing min wage wouldn't let the trained people's wages higher since both trainee and trained people would have KD5.50
D. The greatest growth in Kirlandia’s economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.
--> This could suit if "much higher than the minimum wage" would have instead been "higher than KD 5"
E The current minimum wage is insufficient for a worker holding only one job to earn enough to support a family ,even when working full time at that job.
--> Doesn't impact the argument

Please help me reach the answer.

[RonPurewal]

C. Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.
--> fixing min wage wouldn't let the trained people's wages higher since both trainee and trained people would have KD5.50

According to what's written, trainees (= new hires) are at or around 5.00. They'll go up to somewhere around 5.50.

The point here is that, to keep the trained workers happy, they have to keep their pay above the trainees' pay. Common sense says that there's some required difference"”call that "epsilon""”that the trained workers will need to be happy with their pay.

So, whereas the trained workers previously would have wanted just 5.00 + epsilon, now they'll want 5.50 + epsilon.
That's the point.

D. The greatest growth in Kirlandia’s economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.
--> This could suit if "much higher than the minimum wage" would have instead been "higher than KD 5"

True.
Note that the entire point of writing "MUCH higher" is to convey the idea that we're talking about wages >> 5.50. So, changes so far below won't have an impact.

[divineacclivity]

Thank you, Ron. I think I better understand your point now; I also have a small follow-up query.

The big issue understanding option C was that I mistook an existing situation "businesses reward trained by keeping their paylevels higher than those of trainees ..." for a statement of suggestion/order because of the presence of word/verb "must" i.e. it sounded to me like a suggestion or thing to be implemented as in "they should implement such paylevel differences to keep their employees happy"
I'm not sure if I could make you understand what I'm saying. If not, please excuse me; i wouldn't eat more of your time explaining what i mistook the statement for.

My follow up query is:
The argument say: The increment in min wage is too small to really impact anything => this small difference created in the paylevels of trained and the trainee might NOT really provoke the businesses to increase the paylevels of the trained unless the businesses are hard-bent on maintaining the difference (between the paylevels of the trained and the trainee) & the option doesn't talk about maintaining the difference, rather it just says that the paylevels should be more.

Am I thinking way too much? Or, even if my logic is correct, this option would still impact the argument more than do other options?

Thank you very much for your valuable knowledge-sharing.
--------------------
C. Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.

C. Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.
--> fixing min wage wouldn't let the trained people's wages higher since both trainee and trained people would have KD5.50

According to what's written, trainees (= new hires) are at or around 5.00. They'll go up to somewhere around 5.50.

The point here is that, to keep the trained workers happy, they have to keep their pay above the trainees' pay. Common sense says that there's some required difference"”call that "epsilon""”that the trained workers will need to be happy with their pay.

So, whereas the trained workers previously would have wanted just 5.00 + epsilon, now they'll want 5.50 + epsilon.
That's the point.

D. The greatest growth in Kirlandia’s economy in recent years has been in those sectors where workers earn wages that tend to be much higher than the minimum wage.
--> This could suit if "much higher than the minimum wage" would have instead been "higher than KD 5"

True.
Note that the entire point of writing "MUCH higher" is to convey the idea that we're talking about wages >> 5.50. So, changes so far below won't have an impact.

[RonPurewal]

Thank you, Ron. I think I better understand your point now; I also have a small follow-up query.

The big issue understanding option C was that I mistook an existing situation "businesses reward trained by keeping their paylevels higher than those of trainees ..." for a statement of suggestion/order because of the presence of word/verb "must" i.e. it sounded to me like a suggestion or thing to be implemented as in "they should implement such paylevel differences to keep their employees happy"
I'm not sure if I could make you understand what I'm saying. If not, please excuse me; i wouldn't eat more of your time explaining what i mistook the statement for.

"Must" = "is/are required to".
If a requirement is stated, you can reject interpretations that fail to satisfy the requirement"”unless the entire point of the passage is to determine whether some requirement might be satisfied.

[RonPurewal]

My follow up query is:
The argument say: The increment in min wage is too small to really impact anything => this small difference created in the paylevels of trained and the trainee might NOT really provoke the businesses to increase the paylevels of the trained unless the businesses are hard-bent on maintaining the difference (between the paylevels of the trained and the trainee) & the option doesn't talk about maintaining the difference, rather it just says that the paylevels should be more.

Am I thinking way too much? Or, even if my logic is correct, this option would still impact the argument more than do other options?

Common sense dictates that, if a difference must be maintained, the pay levels will rise together.
At the least, it's very, very, VERY likely. Much more likely to be true than not to be true.

If this were arbitrary"”might be true or might not, with approximately equal likelihood"”then it would be a wrong answer. Arguments can't depend on "might or might not".

[divineacclivity]

Common sense dictates that, if a difference must be maintained, the pay levels will rise together.
At the least, it's very, very, VERY likely. Much more likely to be true than not to be true.

If this were arbitrary"”might be true or might not, with approximately equal likelihood"”then it would be a wrong answer. Arguments can't depend on "might or might not".

Right, right. I get that, if a difference must be maintained, it only makes sense to assume that the pay levels would rise but the option does NOT talk about "maintaining the difference"; it just says that the paylevels should be higher - which might just be true already that their trained work force is already getting paid better than trainees. I'm copying the option C down here for you quick reference.

C. Many businesses hire trainees at or near the minimum wage but must reward trained workers by keeping their paylevels above the pay level of trainees.

I'm just stuck on this one.

[RonPurewal]

Right, but we're talking about a sense of reward.

This is where common sense makes a contribution. If the trained employees have stagnant pay while the trainees all get a raise, will they still feel rewarded?
Heck no.