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Weekly transfer amount to on an hourly basis

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In 2016, the Florida minimum wage is $8.05 per hour. By contrast the average earnings in Florida in 2016 are about $24.25 per hour and certain highly skilled professionals, such as doctors and lawyers, earned $120 or more per hour.

a. If we assume that wage differences are caused solely by differences in productivity; how many times more If we assume that wage differences are caused solely by differences in productivity; how many times more How many times more productive was a $120-per-hour lawyer compared to a worker earning minimum wage?

b. Assume that there are 25 minimum wage workers in the economy for each $120-per-hour lawyer. Also assume that both lawyers and minimum wage workers work the same number hours per week. If everyone works 40 hours per week, how much does a $120-per-hour lawyer earn a week? How much does a minimum wage worker earn a week?

c. Suppose the government pairs each $120-per-hour lawyer with 25 nearby minimum wage workers. If the government taxes 30 percent of each lawyer's income each week and distributes it equally among the 25 minimum wage workers with whom each lawyer is paired, how much will each of those minimum wage workers receive each week? If we divide by the number of hours worked each week, how much does each minimum wage worker's weekly transfer amount to on an hourly basis?

d. What if instead the government taxed each lawyer 100 percent before dividing the money equally among the 25 minimum wage workers with whom each lawyer is paired -- how much per week will each minimum wage worker receive? And how much is that on an hourly basis?

Reference no: EM132519779

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