According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because
A) the demand for minimum-wage labor is highly elastic.
B) it reduces turnover among minimum-wage workers, prompts employers to use them more efficiently, and thus raises their average productivity.
C) it encourages teenagers to stay in school.
D) employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same.

Question

Quizplus · Accepted Answer

Supporters of the minimum wage argue that it can lead to positive effects such as reducing turnover among minimum-wage workers and prompting employers to use them more efficiently, which in turn can lead to higher productivity. This can offset any negative employment effects the minimum wage might have. Additionally, some studies have found that the demand for minimum-wage labor is not as elastic as previously thought, meaning that employers may not significantly reduce their workforce in response to a higher minimum wage.

According to Some Supporters of the Minimum Wage, It Has