What effect can a lack of minimum wage have on employees' financial situations?

The correct answer identifies that a lack of minimum wage can lead to potentially lower living standards for employees. When there is no established minimum wage, employers have the discretion to pay their workers whatever they deem fit, which can result in wages that are insufficient to cover basic living expenses. As a consequence, employees may struggle to afford essential needs such as housing, food, healthcare, and transportation. This financial strain can lead to increased stress, decreased morale, and challenges in maintaining an overall quality of life.

In contrast, options such as stabilizing income, offering better job control, or enhancing job security do not align with the realities faced by employees in a scenario without minimum wage protections. Without a minimum wage, income becomes less predictable, job stability is compromised due to the variability of employer payment practices, and employees may have little leverage or control over their pay and working conditions. Therefore, the absence of a minimum wage creates an environment where financial instability can thrive, negatively impacting employees' living standards.