Suppose the wage of unskilled workers is equal to the minimum wage.If a tax on labor is levied on _____,the presence of the minimum wage _____.

Question

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When a tax on labor is levied on workers, the presence of the minimum wage means that the wage cannot legally go below a certain level. Therefore, if the wage of unskilled workers is already at the minimum wage, imposing a tax on these workers does not change their wage; instead, the tax effectively reduces their take-home pay without altering the minimum wage itself. Thus, the presence of the minimum wage does not affect the tax burden of workers in this scenario, as their wages cannot decrease below the minimum wage due to the tax.

Suppose the Wage of Unskilled Workers Is Equal to the Minimum