n the news on Saturday, October 3“, 2020 Geneva voted by a two-thirds majority to introduce a minimum wage of 23 Swiss francs ($25) an hour for a 41-hour work week. That adds up to somewhere in the range of $4,100 a month, or $53,300 annually. The Geneva minimum wage is the highest minimum wage ever. In comparison, the federal minimum wage in the US is $7.25 an hour. Across the Swiss border, in France, the minimum wage is half Geneva's minimum wage (i.e., assume the French minimum wage is $12.50 an hour). The measure will be executed this month, according to an organization representing the cross-border workers of France and Switzerland. "With these votes, Geneva has managed to maintain its attractiveness by rejecting the closure of borders and adopting a minimum wage," the group wrote in a brief post, lauding the decision and stating that the opposite outcome "could have jeopardized the free movement of nearly 200,000 cross-border workers." Opponents of the new minimum wage argued that it would lead to job elimination and an increase in unemployment. The current pandemic has shed fresh light on the ongoing problem of poverty in Geneva, which the coronavirus has significantly exacerbated. Last month, television channel France 3 reported that, despite the city's wealthy reputation, thousands had recently stood in line beginning at the crack of dawn just to get free food. According to Switzerland's Federal Statistics Oce, approximately 8% of the Swiss population lives in poverty. a. Please graph the Geneva labor market after the imposition of a minimum $25 wage, assuming that the prevailing free market wage rate in Geneva is the same as the French minimum wage of $12.50. Using the graph to assist, explain what the expected outcome would be on the number of persons able to find employment, the number of people who would be seeking employment, and the unemployment rate.
n the news on Saturday, October 3“, 2020 Geneva voted by a two-thirds majority to introduce a minimum wage of 23 Swiss francs ($25) an hour for a 41-hour work week. That adds up to somewhere in the range of $4,100 a month, or $53,300 annually. The Geneva minimum wage is the highest minimum wage ever. In comparison, the federal minimum wage in the US is $7.25 an hour. Across the Swiss border, in France, the minimum wage is half Geneva's minimum wage (i.e., assume the French minimum wage is $12.50 an hour). The measure will be executed this month, according to an organization representing the cross-border workers of France and Switzerland. "With these votes, Geneva has managed to maintain its attractiveness by rejecting the closure of borders and adopting a minimum wage," the group wrote in a brief post, lauding the decision and stating that the opposite outcome "could have jeopardized the free movement of nearly 200,000 cross-border workers." Opponents of the new minimum wage argued that it would lead to job elimination and an increase in unemployment. The current pandemic has shed fresh light on the ongoing problem of poverty in Geneva, which the coronavirus has significantly exacerbated. Last month, television channel France 3 reported that, despite the city's wealthy reputation, thousands had recently stood in line beginning at the crack of dawn just to get free food. According to Switzerland's Federal Statistics Oce, approximately 8% of the Swiss population lives in poverty. a. Please graph the Geneva labor market after the imposition of a minimum $25 wage, assuming that the prevailing free market wage rate in Geneva is the same as the French minimum wage of $12.50. Using the graph to assist, explain what the expected outcome would be on the number of persons able to find employment, the number of people who would be seeking employment, and the unemployment rate.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:n the news on Saturday, October 3d, 2020
Geneva voted by a two-thirds majority to introduce a minimum wage of 23 Swiss francs ($25) an hour
for a 41-hour work week. That adds up to somewhere in the range of $4,100 a month, or $53,300
annually. The Geneva minimum wage is the highest minimum wage ever.
In comparison, the federal minimum wage in the US is $7.25 an hour. Across the Swiss border, in
France, the minimum wage is half Geneva's minimum wage (i.e, assume the French minimum wage
is $12.50 an hour).
The measure will be executed this month, according to an organization representing the cross-border
workers of France and Switzerland. "With these votes, Geneva has managed to maintain its
attractiveness by rejecting the closure of borders and adopting a minimum wage," the group wrote in
a brief post, lauding the decision and stating that the opposite outcome "could have jeopardized the
free movement of nearly 200,000 cross-border workers." Opponents of the new minimum wage
argued that it would lead to job elimination and an increase in unemployment.
The current pandemic has shed fresh light on the ongoing problem of poverty in Geneva, which the
coronavirus has significantly exacerbated. Last month, television channel France 3 reported that,
despite the city's wealthy reputation, thousands had recently stood in line beginning at the crack of
dawn just to get free food. According to Switzerland's Federal Statistics Oce, approximately 8% of the
Swiss population lives in poverty.
a. Please graph the Geneva labor market after the imposition of a minimum $25 wage, assuming that the
prevailing free market wage rate in Geneva is the same as the French minimum wage of $12.50. Using
the graph to assist, explain what the expected outcome would be on the number of persons able to
find employment, the number of people who would be seeking employment, and the unemployment
rate.
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