According to the paper by Card and Krueger, minimum wages do not decrease employment in the fast food industry. Based on our discussion in class, why might this be?
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Employers offset the higher cost of labor by decreasing benefits to employees.
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Minimum wages in the US are not binding, so increasing them will have no effect.
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Employers offset the higher cost of labor by increasing the cost of the food they sell.
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The market for "low skilled labor" is not competitive. There are relatively few companies hiring, so they pay below market equilibrium wages.
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