Logical Reasoning

PT151 · S3 · Q19 Economist: The wages of many

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Economist: The wages of many of the lowest-paid corporate employees in this country would be protected from cuts by enacting a maximum wage law that prohibits executives at any corporation from earning more than, say, 50 times what the corporation’s lowest-paid employees in this country earn.

Conclusion

Setting a max wage would protect the country's lowest paid corporate employees from wage cuts.

Evidence

Setting a max wage would remove one incentive (cutting employee pay in order to boost profits and thus executive salaries) for cutting the wages of the lowest paid employees.

Evaluate

The author seems to be assuming a couple things: - if you remove an incentive for doing X, people will no longer do it for that reason - if you remove an incentive for doing X, there isn't some other incentive that would still be a compelling reason to do X

Maybe with a max wage law, executives would no longer have the incentive to cut wages for the sake of increasing their own salaries, but they would still have the incentive to cut wages for the sake of increasing profits so that they could flatter their vanity by appearing on the cover of Forbes for their super-profitable business.

Salary isn't necessarily the only thing motivating wage cuts.

Goal

Look for an answer ruling out some other reason why executives would want to cut wages, or for an answer that just connects the language of premise to conclusion: .

19.

Which one of the following is an assumption the economist's argument requires?

  1. All of the lowest-paid corporate

    Too Strong: all

    The author doesn't need to assume that every single lowest-paid corporate employee works at a corporation that already pays its executives more than 50 times the lowest paid. He's proposing that a max wage law would protect the employees of corporations in which some executives might try to cut wages to boost their salaries beyond the horizon of the 50x mark. He doesn't need to assume that every corporation in the country already has exorbitant CEO pay. He's just suggesting a law that would protect employees from allowing CEO's to get to that level in the future.

    8% picked this

  2. Some corporate executives who cut

    Weakens, if Anything

    If we negate this, it's saying "None of the CEO's who cut wages to increase their profits make less than 50 times their lowest paid employee". Rephrased positively, "All of the CEO's who cut wages to increase their profits make more than 50 times their lowest paid employee". Does that negation weaken? No, that seems to strengthen, because it would indicate that setting a 50x max on CEO pay would be restraining those CEO's who cut wages. The correct answer, when negated, should badly weaken the argument.

    8% picked this

  3. No corporate executives in the

    Opposite Logic

    This says, if there isn't a max wage no CEO would law linking CEO pay to → raise the wages of lowest-paid employees lowest-paid employees That doesn't resemble the author's argument. He was saying, If there were a max no CEO would lower wage law linking → the wages of the CEO pay to lowest lowest-paid employees

    10% picked this

  4. If corporate executives could not

    Too Strong: never

    There might be other cases in which CEOs would change the wages of their lowest-paid employees. Maybe there is a new minimum wage law enacted that causes the CEOs to change the wages of the lowest-paid. Since this is conditional, we can ask ourselves whether our author's argument made this move: CEO's can't increase their never change pay by cutting pay/benefits → wages of those of lowest-paid employees employees Our author was just thinking that if we set a max wage law, the CEO's (at a certain point) couldn't boost their salary by cutting pay, and so they wouldn't lower their lowest-paid employees' salaries any more. But this answer is saying the wages would never change, and that also rules out raising the pay of the lowest-paid employees, which is not something the author ever talked about.

    19% picked this

  5. Correct

    If such a maximum wage

    Why this is right

    This is just stating something that the author was clearly thinking, "A max wage law would do at least some restraining of wage cutting". If we negate this answer, it's saying that "we enact the max wage law, and zero CEOs refrain from cutting the pay/benefits of their lowest-paid employees". Does that hurt the argument? Of course! That makes it sound like the max wage law would offer zero protection since it wouldn't cause a single CEO to refrain from cutting pay and benefits.

    Skill tested: Necessary Assumption · how this choice captures the argument's function is the move to repeat next time.

    55% picked this

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