Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 20 - Income Inequality, Poverty, and Discrimination - Problems - Page 432: 3c

Answer

${$50}$ Increases by ${$1.25}$/hour.

Work Step by Step

From part (b), the lawyer earns ${$4,000}$/week, so when the government takes 25% of that as tax, they take ${$1000}$ in tax, and distributed among 20 workers, each worker will receive ${$50}$. Divided over the number of hours, a minimum wage worker's hourly pay increases by $\frac{$50}{40}$ = ${$1.25}$/hour.
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