How wages are set: skills, demand for workers and unions

Grade 12 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Cards A to C on a nurse labor market (all made up for practice). Card A, "Nurses in one region (made up)". Written for this sheet. Table, columns Wage per hour | Nurses hospitals want | Nurses who offer to work: $20 | 140 | 60; $25 | 120 | 80; $30 | 100 | 100; $35 | 80 | 120; $40 | 60 | 140. Card B, "Hospitals expand (made up)". Written for this sheet. Summary in our words, not a quotation: new hospital wings open. At every wage, hospitals now want 40 more nurses than card A shows. Card C, "More graduates (made up)". Written for this sheet. Summary in our words, not a quotation: nursing schools graduate more students. At every wage, 40 more nurses now offer to work than card A shows.

2. 1.

   Esme uses cards A and B. Where does the nurse labor market settle after the hospitals expand?

   • At $30 with 140 nurses: hospitals hire 40 more at the old wage, since the nurses are available
   • At $25 with 120 nurses: more nurses are hired, so the extra supply lowers the wage
   • At $35 with 80 nurses: the higher wage settles at the old quantity, because the supply of nurses has not changed
   • At $35 with 120 nurses: the wage and employment both rise
3. 2.

   Ren uses cards B and C together. Before checking the numbers, what can be said about the wage and employment?

   • The wage falls and employment falls, since more nurses and more openings together lead to less hiring
   • The wage rises and employment rises, since hospitals' demand for nurses pushes the wage up
   • Employment is unchanged and the wage is unchanged, since the two shifts cancel each other out
   • Employment rises for sure, but the wage could rise, fall or stay put, depending on which shift is larger
4. 3.

   Luz uses all three cards. Where does the market settle once both shifts happen?

   • At $25 with 120 nurses: the new graduates lower the wage and the hospitals' demand does not matter
   • At $30 with 140 nurses: the wage is the same as before, and employment is 40 higher
   • At $35 with 120 nurses: the hospitals' demand raises the wage and the new graduates do not matter
   • At $30 with 100 nurses: the shifts cancel, so the market ends up where it began

5. Use this

   Cards A to C on the payroll tax (card A is a Social Security summary; cards B and C are made up). Card A, "The Social Security payroll tax". Source: Social Security Administration, tax rate and contribution base information (ssa.gov), read Nov 14, 2026. Summary in our words, not a quotation: the law makes the employee pay 6.2 percent of wages and the employer pay another 6.2 percent, up to a yearly limit. Card B, "Town J (made up)". Written for this sheet. Summary in our words, not a quotation: in Town J the employer's share of this tax was cut from 6.2 percent to 4.2 percent of wages. Over the next year, wages before any taxes rose 1.6 percent more in Town J than in nearby towns. Hiring did not change. Card C, "Two speakers (made up)". Written for this sheet. Summary in our words, not a quotation: Speaker X says the law splits the tax in half, so employers and workers each bear half. Speaker Y says the employer's share comes out of nothing but profit, so workers are untouched.

6. 4.

   Milo weighs speakers X and Y on card C using cards A and B. Which statement fits the evidence best?

   • Neither fits: in Town J workers received 1.6 of the 2 points of a cut in the employer's share
   • X fits: the law splits the tax 6.2 and 6.2, so the burden is shared equally by employers and workers
   • Y fits: employers pay their share out of profit, so a cut in it leaves wages untouched
   • X fits: workers got 1.6 percent, which is about half of the 2-point cut and half is what X predicts
7. 5.

   Congress proposes to move the whole 12.4 percent onto employers. Pia uses cards A and B. What is a likely effect on workers' pay?

   • Workers' take-home would change little, because wages would adjust and shift the burden back
   • Workers would gain the full 6.2 points, since they would no longer pay any of the tax
   • Employers would bear the whole tax, since the law would make them the ones who send it in
   • Wages would not move, since firms pay whatever tax the law sets and workers see no change

8. Use this

   Cards A to C on the minimum wage (cards A and B are data; card C is made up). Card A, "The federal minimum wage". Source: U.S. Department of Labor, Wage and Hour Division, Federal Minimum Wage chart (dol.gov), read Nov 14, 2026. Summary: the federal minimum wage has been $7.25 an hour since July 24, 2009. Card B, "The CPI-U in two years". Source: BLS, CPI-U annual averages (1982–84 = 100), read through the BLS public data API on Nov 14, 2026. Table, columns Year | CPI: 2009 | 214.537; 2024 | 313.689. Card C, "State K (made up)". Written for this sheet. Summary in our words, not a quotation: State K plans to raise its minimum wage from $10 to $12 an hour. 100,000 workers earn the current minimum. An estimate says jobs for these workers fall 0.1 percent for each 1 percent rise in their wage.

9. 6.

   Bo uses card C. Which statement about State K's plan is best supported?

   • Most affected workers gain and about 2,000 lose jobs, so the group's total pay rises by about 18 percent
   • The plan defeats itself, since the jobs lost outweigh the gain from the higher wage for those who stay
   • No one loses, since a higher wage raises spending and so raises the number of jobs for these workers
   • The group's total pay falls, since 2,000 workers lose their whole pay while the others gain a little
10. 7.

    A writer says the 2 percent job loss shows the plan costs little. What evidence would most challenge the writer, in Tala's view?

    • Whether hours or the hiring of new workers also fell, which a count of current jobs would miss
    • Whether the 100,000 workers each earned exactly $10 before, since some may have earned more
    • The federal minimum of $7.25, since a lower federal wage would show what State K's workers earn
    • Whether the state's overall unemployment rate rose, since that shows if jobs for these workers fell

11. Use this

    Cards A to C on training and pay (all made up for practice). Card A, "Dana's choice (made up)". Written for this sheet. Summary in our words, not a quotation: Dana earns $18 an hour for 2,000 hours a year. A two-year full-time program costs $12,000 a year in tuition, and Dana would earn nothing while in it. After the program Dana would earn $26 an hour for 2,000 hours a year. Card B, "If many train (made up)". Written for this sheet. Summary in our words, not a quotation: when many more people complete the program, the wage for people with the training falls to $22 an hour. Card C, "Two programs (made up)". Written for this sheet. Summary in our words, not a quotation: in Program P, people chose whether to enter; those who entered later earned $26 an hour and those who did not earned $20. In Program Q, seats were given by lottery; winners later earned $24.50 and losers earned $20.50.

12. 8.

    Kira reads card A. What does the program really cost Dana?

    • $72,000, the pay Dana gives up, since tuition is paid by the program rather than by Dana
    • $80,000: $96,000 less the $16,000 Dana gains in the first year, since gains begin at once
    • $96,000: $24,000 of tuition plus the $72,000 of pay Dana gives up in two years
    • $24,000, the tuition, since that is the money Dana has to pay out
13. 9.

    Zee reads cards A and B together. How long would Dana take to earn back the program's cost if the trained wage falls to $22?

    • About 4 years, since more trained workers raise demand and push the $22 wage back up to $30
    • 12 years: the yearly gain falls from $16,000 to $8,000, so the payback takes twice as long
    • 6 years, since Dana's $26 wage depends on Dana's own training and not on other people's training
    • 9 years, halfway between the old payback and the new one, since the $22 effect is partly offset
14. 10.

    Ari compares Programs P and Q on card C. Which statement about what training adds is best supported?

    • Neither says anything about training, since people in either program earned different amounts for many reasons
    • Program P is the better guide, about $6 an hour, since a larger gap measures the effect of training better
    • Program Q is the better guide, about $4 an hour, since a lottery makes winners and losers alike
    • The two programs agree, since training added at least $4 an hour in both and more than $0 is enough