The recent reduced demand for unskilled workers relative to skilled workers has led to ______ for unskilled workers in Europe compared to ______ for unskilled workers in the United States.
A) unemployment; lower wages
B) lower wages; unemployment
C) more unionization; efficiency wages
D) efficiency wages; more unionization

Question

Quizplus · Accepted Answer

The reduced demand for unskilled workers relative to skilled workers has led to higher unemployment rates for unskilled workers in Europe, due to more rigid labor markets and stronger social safety nets that discourage rapid wage adjustments. In contrast, in the United States, where the labor market is more flexible and there is less of a social safety net, the consequence has been lower wages for unskilled workers rather than higher unemployment.

The Recent Reduced Demand for Unskilled Workers Relative to Skilled