Question 129·Hard·Inferences
The efficiency-wage hypothesis proposes that employers who pay wages higher than the prevailing market rate can, in return, obtain a more productive and reliable workforce. In 1914, automobile manufacturer Henry Ford doubled his factory workers’ daily pay to $5, later explaining that the increase would lower overall production costs by sharply reducing turnover and absenteeism. Some contemporary labor economists doubt that cost-saving was Ford’s primary motive, pointing instead to growing union agitation at the time. Nevertheless, these economists acknowledge that the subsequent decline in absenteeism and increase in output at Ford’s plants were “exactly what the efficiency-wage model would forecast.”
Given the information, regardless of whether reducing costs was Ford’s chief purpose, both Ford and these economists would most likely agree that ______
Which choice most logically completes the text?
For inference questions that ask what two parties would agree on, first mark exactly where each viewpoint is described and note their disagreements (often about motives or causes). Then look for any shared facts or outcomes explicitly stated in the passage—especially around contrast words like “however,” “nevertheless,” or phrases like “both” or “also.” Finally, choose the option that paraphrases that shared ground without adding new claims, extreme language (like “always,” “never,” “every”), or taking sides on disputed points.
Hints
Separate agreement from disagreement
Look for the parts of the passage that describe what Ford thought versus what “some contemporary labor economists” thought. What do they disagree on, and what do they still both accept?
Focus on the phrase after “nevertheless”
After the economists’ doubts are explained, the word “Nevertheless” signals something important they still concede. What do they acknowledge happened at Ford’s plants?
Turn specific outcomes into a general idea
From the noted decline in absenteeism and increase in output after the wage raise, what broader conclusion about wages and workers’ performance can both sides reasonably share?
Eliminate extreme or off-topic choices
Watch for choices that take a side on Ford’s motive or that turn the observed outcomes into a guaranteed claim about costs or about when efficiency-wage effects can/can’t happen.
Step-by-step Explanation
Pinpoint what the question is asking for
The question asks what both Ford and the economists would agree on, regardless of Ford’s main motive. That means we should ignore where they disagree (his reasons) and focus on what they both accept as true.
Identify where they disagree
Ford “later explain[ed] that the increase would lower overall production costs by sharply reducing turnover and absenteeism.” Some economists doubt that cost-saving was his primary motive and instead “point…to growing union agitation.” So the disagreement is about why he did it (cost-saving vs. union pressure).
Find what they both accept as true
Even though those economists question Ford’s motive, they still “acknowledge that the subsequent decline in absenteeism and increase in output at Ford’s plants were ‘exactly what the efficiency-wage model would forecast.’” Ford also referred to the wage increase reducing turnover and absenteeism. So both sides recognize that after the wage increase, workers showed up more and produced more, matching a prediction of the efficiency‑wage idea.
Translate that shared observation into a general statement and match it to a choice
Their common ground is that paying more than the usual market wage was followed by lower absenteeism and higher output—evidence that higher pay can go along with higher worker performance. The only option that restates this shared conclusion is: “raising wages above the market level can result in demonstrably higher worker productivity.”