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

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

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

4. 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.

5. 3.

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

   • 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
   • X fits: the law splits the tax 6.2 and 6.2, so the burden is shared equally by employers and workers
   • Neither fits: in Town J workers received 1.6 of the 2 points of a cut in the employer's share
6. 4.

   Jun uses card B. About what share of the 2-point cut in the employer's tax did workers receive as higher wages?

   • About 80 percent: wages rose 1.6 percent against a 2-point cut in the tax
   • About 1.6 percent: the share equals the rise in wages shown on card B for Town J
   • The whole cut: wages rose and hiring did not change, so the full cut reached workers
   • About 20 percent: employers kept most of the cut, and the 0.4 left over went to workers
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
   • Employers would bear the whole tax, since the law would make them the ones who send it in
   • Workers would gain the full 6.2 points, since they would no longer pay any of the tax
   • 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.

   Noah uses cards A and B. What is the federal wage of $7.25 in 2024 worth in 2009 dollars?

   • About $10.60: the wage must be raised to $10.60 in 2024 to match what $7.25 bought in 2009
   • About $7.25: a law fixes the wage in dollars, so its worth in 2009 dollars is the same
   • About $3.64: the index rose 99 points, which is 99 percent, so buying power was cut nearly in half
   • About $4.96: the nominal wage has not changed, but prices rose about 46 percent since 2009
10. 7.

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

    • The plan defeats itself, since the jobs lost outweigh the gain from the higher wage for those who stay
    • Most affected workers gain and about 2,000 lose jobs, so the group's total pay rises by about 18 percent
    • 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
11. 8.

    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 the state's overall unemployment rate rose, since that shows if jobs for these workers fell
    • The federal minimum of $7.25, since a lower federal wage would show what State K's workers earn
    • 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

12. 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.

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?

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

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

    • The two programs agree, since training added at least $4 an hour in both and more than $0 is enough
    • 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