Minimum Wage Floor Effect

Steps:

• Assume cleaners earn below OM (minimum wage) and nurses earn above OM based on typical labor markets.
• National minimum wage sets a legal floor at OM, forcing employers to raise sub-minimum wages.
• Cleaners' wages increase to meet the OM floor.
• Nurses' wages remain unchanged as they exceed OM and are not directly impacted.

Why D is correct:

• Minimum wage law establishes a price floor for labor, raising wages only for jobs below the threshold while leaving higher wages unaffected (per basic economic principle of wage floors).

Why the others are wrong:

• A: Cleaners' wages rise, not fall; nurses unchanged.
• B: Cleaners' wages rise, not unchanged.
• C: Nurses' wages do not fall; cleaners rise.

Final answer: D