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The question is from CAT Paragraph Completion. CAT exam will have 1~2 questions from Paragraph Completion. Solve CAT Questions from Paragraph Completion to get more practice and 2IIMs CAT questions bank provides you with CAT questions from Para Completion that can help you gear for CAT Exam.

Question 5: By calling for exempting unionized businesses from the minimum wage, unions are creating more incentives for employers to favor unionized workers over the non-unionized sort. Such exemptions strengthen their power. This is useful because for all the effort unions throw at raising the minimum wage, laws for better pay have an awkward habit of undermining union clout.

  1. High rates of unionization make minimum-wage rules unnecessary as collaborative wage setting achieves the flexibility goals of a low minimum wage and the fairness goals of a high one.
  2. Workers who have no real alternative to employment in the unregulated shadows of the labor market are even more vulnerable to exploitation and abuse than workers with the legal right to take low wages.
  3. The labor ethos of worker solidarity seems hollow if non-union workers are underpriced by union workers and left unemployed or scrambling for unauthorized work.
  4. Once employers are obliged to pay the same minimum wage to both unionized and non-unionized labor, workers often see less reason to pay the dues to join a union.

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Explanatory Answer

Method of solving this CAT Question from Paragraph Completion:

The paragraph starts by saying that unions are calling for exempting unionized businesses from the minimum wage. This provides incentives for employers to favor unionized workers over those who have not joined one. The paragraph further states that such exemptions increase the power of the union. Unions need this boost in power because though they argue for better pay, minimum wage laws actually reduce the clout of the union.

The key idea here is the rather contrary effect of the minimum wage law on the power of the unions, and the bid of the unions to strengthen their clout with the call for exemption from minimum wage for unionized businesses.

Sentence A talks of the effect of high rates of unionization. It makes minimum wage laws unnecessary as the unions are able to achieve flexible and fair wages through collaboration. This sentence does not complete the given paragraph, which discusses the effect of minimum wage laws on the clout of the union and not the vice-versa.

Sentence B discusses the case of workers without the legal right to take the low wages (as set by the minimum wage law) and no real alternative to employment being more vulnerable to exploitation. This is a new line of thought and does not complete the paragraph given.

Sentence C argues that the spirit of worker solidarity seems hollow if non-unionized workers are under-priced by their unionized counterparts.

This is a thought that seems, at the outset, to be related to the idea discussed in the paragraph. Unions are calling for exempting unionized businesses from the minimum wage. Thus they are encouraging employers to prefer unionized workers over the non-unionized and thus going against the ethos of worker solidarity.

However, this choice is incorrect, as the given paragraph is about why and how unions are seeking to increase their power having worked towards minimum wage laws, which, rather contrarily, decrease their clout. Sentence C does not carry forward the idea in the penultimate sentence about how laws for better pay have the “awkward habit of undermining union clout”.

Sentence D discusses the idea that workers have less incentive to pay and join a union when protected by minimum wage laws. This, clearly, undermines the clout of the unions. Thus sentence D provides a good choice to complete the given paragraph, carrying forward the idea expressed in the penultimate line.

The question is " Choose the Sentence that completes the Paragraph "

Hence, the answer is Sentence D

Choice D is the correct answer.

 


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