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

Grade 12 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Use this

   Cards A and B on a baker labor market (all made up for practice). Card A, "Bakers in one town (made up)". Written for this sheet. Table, columns Wage per hour | Bakers firms want | Bakers who offer to work: $12 | 140 | 60; $14 | 120 | 80; $16 | 100 | 100; $18 | 80 | 120; $20 | 60 | 140. Card B, "A new chain opens (made up)". Written for this sheet. Summary in our words, not a quotation: a new bakery chain opens in town. At every wage, local firms now want 40 more bakers than card A shows. The number of bakers who offer to work at each wage does not change.

2. 1.

   Jun uses cards A and B. Where does the wage settle after the chain opens?

   • At $18 with 80 bakers: the wage rises, but the higher wage leads firms to hire fewer bakers than before
   • At $20 with 100 bakers: the wage keeps rising until firms want just the 100 bakers they hired before
   • At $16 with 140 bakers: the wage stays where it was and firms simply hire 40 more people
   • At $18 with 120 bakers: a rise in demand lifts both the wage and the number employed
3. 2.

   Esme looks at the old wage of $16 after the chain opens. What do cards A and B show there?

   • A shortage of 80 bakers: firms now want 100 more bakers than the 100 who offer to work
   • A surplus of 40 bakers: 140 offer to work at $16 and firms want only 100 of them
   • A shortage of 40 bakers: firms want 140 and only 100 offer to work at $16
   • No shortage: $16 was the wage where firms and bakers agreed, and a wage that agreed once still does
4. 3.

   A reader says wages rose because bakers became more willing to work. Ren checks card B. What is the verdict?

   • Not supported, because wages in a town are set by the owners of the firms and not by supply or demand
   • Not supported: card B changes only firms' demand, and the bakers offering at each wage are the same
   • Supported: more bakers are employed after the chain opens, which shows more bakers were willing to work
   • Supported: a higher wage always brings out more workers, so the supply of bakers must have grown

5. Use this

   Cards A and B on unemployment and schooling (card A is BLS data; card B is a note). Card A, "Unemployment by schooling, 2019, 2020 and 2024". Source: BLS, unemployment rate of people 25 and over by educational attainment, annual averages (series LNU04027659, LNU04027660, LNU04027689, LNU04027662), read through the BLS public data API on Nov 14, 2026. Table, columns Year | No high school diploma | High school diploma | Some college | Bachelor's degree or more: 2019 | 5.4 | 3.7 | 3.0 | 2.1; 2020 | 11.7 | 9.0 | 7.8 | 4.8; 2024 | 6.2 | 4.2 | 3.4 | 2.3. Rates are percents of the labor force. Card B, "What the rate counts". Source: BLS. Summary in our words, not a quotation: the unemployment rate is the share of people in the labor force who have no job, are available to work and have looked for work. Each figure is an average for a group, not a measure for any one person.

6. 4.

   Pia writes one claim from card A. Which claim does the table support best?

   • Finishing school causes lower unemployment, since each extra level of schooling lowers the rate on card A
   • Unemployment rates tell how long people are out of work, so the 2020 rates show very long job searches
   • In each year shown, the more schooling a group had, the lower its unemployment rate
   • People with a bachelor's degree were rarely unemployed in 2020, since their rate was 4.8 percent
7. 5.

   Kira lists four claims. Which one goes beyond what card A and card B show?

   • In 2020 the high school group's rate was 9.0 percent and the some-college group's rate was 7.8 percent
   • Each group's unemployment rate was higher in 2024 than in 2019, at each of the four levels of schooling
   • In 2024 the gap between the no-diploma group and the bachelor's group was 3.9 points
   • Finishing high school would cut any one person's chance of unemployment from 5.4 to 3.7 percent

8. Use this

   Cards A and B on two jobs (all made up for practice). Card A, "Two jobs (made up)". Written for this sheet. Table, columns | Roofer | Clerk: Training needed | 6 months | 6 months; Pay per hour | $24 | $19; Chance of a serious injury in a year | 1 in 10 | 1 in 500; Hours worked in a year | 2,000 | 2,000. Card B, "Ana (made up)". Written for this sheet. Summary in our words, not a quotation: Ana can do either job. Ana would give up $12,000 a year to avoid the extra injury risk of roofing.

9. 6.

   Milo reads card A. Why does the roofer's pay exceed the clerk's even though the training is the same?

   • Roofing pays more because injury risk is low, so firms can afford to pay more for safe work
   • Roofing needs more training, which is why it pays more, as pay follows how long a worker trains
   • Fewer people will take the risky job at the clerk's wage, so roofing must pay more to fill its jobs
   • Roofers produce more value each hour than clerks, so their higher pay simply reflects a larger output
10. 7.

    A safety law cuts the roofer's injury chance to 1 in 50. Noah uses card A. What is the likely effect on roofing pay?

    • Pay stays at $24, since the work itself is unchanged and pay depends on the work done and nothing else
    • Pay falls because firms want fewer roofers, since a law makes the work less profitable
    • Pay tends to rise, since a safer job is more valuable and firms will bid more for roofers
    • Pay tends to fall toward the clerk's, since a safer job draws more people to roofing
11. 8.

    Tala reads cards A and B. Which job should Ana take, and why?

    • Roofer: it pays $5 more an hour, and a higher wage is the better choice for a worker
    • Clerk: its injury chance is lower, and a lower injury chance settles the choice on its own
    • Clerk: roofing's extra $10,000 a year is less than the $12,000 Ana would give up to avoid its risk
    • Roofer: the extra pay is $12,000 a year, which is the amount Ana says is needed

12. Use this

    Cards A and B on a bakery's hiring (all made up for practice). Card A, "A bakery's workers (made up)". Written for this sheet. Table, columns Worker hired | Extra revenue per hour that worker adds: 1st | $40; 2nd | $30; 3rd | $22; 4th | $16; 5th | $10. The ovens and space stay the same. Card B, "The wage (made up)". Written for this sheet. Summary in our words, not a quotation: the bakery pays each worker $15 an hour. Later the wage rises to $18 an hour.

13. 9.

    The wage rises to $18. Bo uses cards A and B. What happens to hiring?

    • The bakery hires five: a higher wage pulls in more workers, so the bakery takes on more staff
    • The bakery hires none, since the wage rose by $3 and a rise that large ends the bakery's profit
    • The bakery hires three: the 3rd worker adds $22, above $18, but the 4th adds only $16
    • The bakery hires four, because the 4th worker adds $16 and card A shows no fall in revenue
14. 10.

    A manager says to hire a 5th worker at $15 because four workers bring in $27 each on average. Ari tests this with card A. What is the verdict?

    • Wrong: $27 is more than the 1st worker's $40, so the manager's average cannot be correct
    • Wrong: the 5th worker adds only $10, below the $15 wage, whatever the average revenue per worker
    • Right: the 5th worker adds revenue of $10, and any added revenue helps the bakery's total
    • Right: the average worker brings in $27, which is far above the $15 wage, so more hiring pays