Economist: Although average hourly wages vary considerably between different regions of this country, in each region,...

Jacob on October 31, 2018

Thanks for your question. The paradox at issue in this passage is that wages went up in every region, but that averaged across all regions, wages went down. Therefore, what we need is an answer that explains something about the regions individually and in combination.

E is incorrect because it does not tell us anything about the regions. It instead tells us something about the manufacturing and service sectors, which is not useful given our paradox.

Answer B on the other hand does tell us something about the regions. It tells us that some regions pay a lot, and some pay a little, and that employers moved many jobs from the places that pay a lot to those that pay a little. So while every region’s wages went up, the average across the regions went down because the distribution of jobs changed.

I hope that helps! Please let us know if you have further questions.

on December 6, 2019

okay. I think I understand how the overall wages decreased and how wages for one region increased (because the low wage regions are getting jobs that pay higher than they are used to but lower than the company would pay in the high wage region). But to have an increase in wage in each region, wouldn't there need to be creation of new jobs in the high wage regions that pay higher than is paid currently? So wouldn't the wages in the high wage region remain constant or decrease as the passage is right now?