Question: In September 1999, Senator Edward Kennedy released a report saying the minimum wage should be raised to $15.28 per hour. The reason for such a big increase, according to Kennedy, was that no one should have to spend more than 30% of their salary on housing, and the minimum price for acceptable housing in the Boston area for a family of four was about $800 per month.
(A) What would happen to unemployment and inflation if the Kennedy plan were implemented?
(B) Explain why or why not the cost of housing for a family of four is the appropriate criterion for determining the minimum wage.
(C) What do you think would happen to Boston area rents and housing prices if in fact the minimum wage were set at $15.28 per hour?