The number of unskilled workers employed before and after an increase in the minimum wage is found to be the same. This means
A)the change in minimum wage created a surplus of workers in the unskilled labor market.
B)the change in minimum wage created a shortage of work
C)the minimum wage could still be below the equilibrium wage for unskilled labor.
D)changes in minimum wage never have an impact on the unskilled labor market.

Question

Quizplus · Accepted Answer

This means that the increase in minimum wage did not affect the demand for or supply of unskilled workers. It is possible that the previous minimum wage was below the equilibrium wage for unskilled labor, and even with the increase, the minimum wage is still below the equilibrium wage. Therefore, the number of unskilled workers remained the same because the market was already in equilibrium before the increase in minimum wage.

The Number of Unskilled Workers Employed Before and After an Increase