A manufacturing firm hires a new assembly line worker at an hourly wage of $30. The government has a program to encourage employment where it provides the firm with a payment equal to 15% of the worker's hourly wage. What is the firm's effective net cost for one hour of this worker's labor?

A company's budget for a new employee has a maximum net cost of $34 per hour. If the government provides a 15% wage subsidy, the highest hourly wage the company can offer is $____. (Answer to two decimal places if necessary).

Hiring Decision with a Wage Subsidy

A 20% wage subsidy on a $50 hourly wage results in the same net labor cost for a firm as a direct government payment of $10 to the firm for every hour worked.