economics due in 2 days

I uploaded the reading that you need to use and another file is questions. You need to answer all of them. This class is about economics

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Wage Floor of $15 Is Seen as an Obstacle for Teens

The Wall Street Journal, March 29, 2021, print edition, By Allison Prang

Raising the federal minimum wage to $15 an hour would make it harder for many teens to get or
keep jobs, adding to the employment challenges they have faced during the pandemic, many
economists say.

Democrats want to raise the federal minimum wage in steps to that level by 2025, from $7.25 an
hour. Most states already have set a higher minimum wage. The plan also would eliminate a
youth subminimum wage that allows businesses to pay teens less during the first 90 days of
work.

The changes would give raises to
millions of workers and lift some out
of poverty, the nonpartisan
Congressional Budget Office has said
in studies. But it also has found about
1.4 million workers would lose their
jobs over the next four years, many of
them teens. “Young, less-educated
people would account for a
disproportionate share of those
reductions,” it said in a February report
on the minimum-wage proposal.

Teens saw much higher rates of
unemployment than the overall
workforce during the pandemic. The
unemployment rate for those between
16- and 19-years old hit almost 32% in
April 2020—more than double a
pandemic-peak for an overall
unemployment rate of 14.8%. Both
rates have eased, but teen
unemployment remained well elevated
at 13.9% in February compared with an
overall jobless rate of 6.2%.

Lauren Gimple, 17 years old, worked at a bakery in Powell, Ohio, earning near the minimum
wage until the pandemic hit. Ohio’s pay floor is $8.80 an hour. She said she left the job because
some family members have compromised immune systems, a risk factor for developing severe
Covid-19, but aims to return when her family is vaccinated.

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“People that have been with the company for longer than I have or who have more of a need—
not just like a teenager trying to make money…I think they will be the ones to kind of keep their
jobs first,” she said.

When joblessness increases broadly, “those on the lowest rungs of the job ladder…are going to
get squeezed out, and mostly that’s teens,” said Alicia Sasser Modestino, a Ph.D. economist at
Northeastern University.

A $15-an-hour minimum wage could further harm teens’ job prospects because some employers
would either cut back on staff or opt to hire someone with more experience, Dr. Modestino said.
“It’s an even bigger impact on youth because of where they are in terms of the hierarchy of the
job market,” she said.

In 2020, 16- to 19-year-olds accounted for 37.5% of those paid the federal minimum wage, while
they represent less than 6% of all hourly workers, according to the Labor Department.

Some businesses say a higher minimum wage for teens could affect staffing plans.

Nader Masadeh, chief executive of Ohio-based restaurant chain Buffalo Wings & Rings, said
teens are around 25% of the restaurants’ staff. Should the federal minimum wage go up, he said
his first step would be to increase menu prices. If he has to cut staff, teens would be let go first,
he added.

“Employers will not be able to afford to hire unskilled and inexperienced workers,” Mr. Masadeh
said.

The minimum-wage proposal pending in Congress, if enacted, would phase in minimum-wage
increases, starting with an increase to $9.50. That means teens wouldn’t face a $15 minimum
wage for a few years.

Nicholas Kellogg, an 18-year-old in Des Peres, Mo., works part time at clothing retailer PacSun.
He said while he would like to earn more, he expects a higher minimum will make it harder for
other teens to join the workforce.

“If companies are going to have to start paying more, they’re going to start hiring less people,”
Mr. Kellogg said. He added that he isn’t worried about his job security, but his 16-year-old
brother doesn’t have much experience. “For him, he would be one of the first people that would
be suffering,” he said.

At PacSun, Mr. Kellogg earns near Missouri’s minimum wage of $10.30 an hour, restocking
shelves and folding clothes. He said he saves half of his pay each week for college and the
future. He spends the rest hanging out with friends, going out to eat and fixing his Ford Focus.

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The proposed minimum-wage increase would come at a time when a smaller share of teens are
working than in the past. Last year, 34.5% of 16- to 19-year-olds worked or sought employment
versus more than half in 1980, according to the Labor Department.

Should teens struggle to find jobs with a higher minimum wage, they could miss out on an
opportunity to gain workplace skills.

“Experience is valuable,” said Abigail
Wozniak, a Ph.D. economist at the
Federal Reserve Bank of Minneapolis.
She compared it to exercise. “There’s
something about being connected to the
labor force,” Dr. Wozniak said. “You
need to have a structure, you need to
have obligations.”

While the federal minimum wage hasn’t
changed since 2009, 29 states have set a
higher level, and in eight the minimum
wage is slated to reach $15 an hour in
the coming years. Those higher pay
floors could be a factor in lower teen
labor-force participation, but they also
have delivered raises to some young
workers.

Nely Vargas, an 18-year-old in Boston,
earns Massachusetts’s $13.50-an-hour
minimum wage working 10 hours a
week as a counselor-in-training at St.
Stephen’s Youth Programs.

She said she uses her pay to rely less on her mother, a single parent. She is saving for a new
computer and pays her own phone bill. She also is working on redecorating her room. The
money she makes at work also has allowed her to treat her mother to a takeout dinner.

“I feel like I can give her a helping hand by not being so dependent on her,” Ms. Vargas said.

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved.

E251-29732, Graded Application Problem Set Two

Due no later than 10:00 p.m. Sunday, April 25.

(Submit by uploading your work in the Canvas Quizzes, quiz: Graded Application Problem Set-2)

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Additional questions on next page.

Coordinating instructions: This is 2 of 2 graded application problem sets. It is worth up to 6
course percentage points. Both graded application problems sets will be worth up to 6 course
percentage points. If you earn greater than 9 course percentage points on the combined graded
application problem sets, then any course percentage points earned above 9 will count in your
course grade as extra credit.

Once you complete your work, create a “ ” file and upload to the canvas quiz called Graded
Application Problem Set Two. There will be one question in the quiz for your complete
assignment to be uploaded.

The submission quiz will open on Wednesday, April 14 and will remain open until 10:00 p.m.,
Sunday, April 25. What you submit last is the one that is graded.

Read the article: Wage Floor of $15 Is Seen as an Obstacle for Teens, By Allison Prang,

appeared in the Wall Street Journal, March 29, 2021, print edition.

• The article is available on the Canvas class site on the page “Graded Application Problem
Sets”

After you read the article answer the below questions and create a “ ” file to submit
your answers in Canvas quizzes.

Question 1. Although the proposed increase in the federal minimum wage to $15 an

hour would lift some workers out of poverty, the Congressional Budget
Office (CBO) has estimated that the higher minimum would result in about
1.4 million workers losing their jobs over a four-year period.

Is the CBO’s estimate an example of positive economic analysis or
normative economic analysis? Briefly explain your answer.

Question 2. Draw and label a graph that depicts a demand curve and a supply curve in
the market for unskilled labor. Show the minimum wage illustrated as a
wage floor at $15 an hour. In your diagram, you should consider the market
rate to be below this wage floor.

Refer to the graph you drew to answer the previous question. Identify the
area in the graph that represents a deadweight loss that would result from
the $15 wage floor.

E252-31408, Graded Application Problem Set One

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Question 3. From the article: “Nicholas Kellogg…works part time at clothing retailer

PacSun…he expects a higher minimum [wage] will make it harder for other
teens to join the workforce…he isn’t worried about his job security, but his
16-year-old brother doesn’t have much experience. ‘For him, he would be
one of the first people that would be suffering,’…”

Assume that minimum wage does increase to $15 an hour and because of
this increase Nicholas Kellogg does not lose his job, but his younger brother
does. What would this imply about the marginal revenue products of
Nicholas and his brother?

Question 4. Assume that the federal minimum wage is increased to $15 an hour. Would
the loss in employment by unskilled workers be greater if the demand for
unskilled workers was relatively elastic, or relatively inelastic? Briefly
explain your answer.