Which of the following is false about minimum wages?
- AA minimum wage law benefits all unskilled workers.
- BA minimum wage harms firms by forcing them to pay higher wages.
- CA minimum wage harms customers because the law usually leads to higher product prices.
- DA minimum wage increases unemployment.
Solution & Step-by-step Explanation
Standard economic theory suggests that minimum wage laws do not benefit all unskilled workers. While it raises wages for those who remain employed, it creates a labor surplus (unemployment), thereby harming those unskilled workers who lose their jobs or are unable to find employment due to the higher cost of labor. Thus, statement A is false.