Who loses and who gains from the minimum wage?
A) Losers are all workers and gainers are all firms.
B) Losers are all firms and gainers are all workers.
C) Losers are all firms and some workers, while gainers are other workers.
D) Gainers are some firms and all workers, while losers are some firms.
E) Gainers are some firms and some workers, while losers are other firms and other workers.

Question

Quizplus · Accepted Answer

While some workers who are paid minimum wage may benefit from an increase, it may result in firms cutting jobs, reducing hours or benefits, or passing on the cost to consumers through higher prices. This would negatively impact some workers and the firms that employ them. However, workers who are not paid minimum wage may benefit from the increase, as it could potentially lift the floor on wages and lead to higher pay overall. Therefore, option C is the best choice as it acknowledges that there are winners and losers on both the firm and worker side.

Who Loses and Who Gains from the Minimum Wage