In a competitive labor market, a minimum wage will lead to unemployment.

Question

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When employers are forced to pay a higher minimum wage, they may not be able to afford to hire as many workers and may choose to cut back on staff or not hire new employees. This can lead to unemployment as individuals who would have been willing to work for a lower wage are no longer able to find employment. Additionally, businesses may look to automate or outsource jobs to lower their labor costs, further contributing to unemployment.

In a Competitive Labor Market, a Minimum Wage Will Lead