00:01
So here we have two supply and demand graphs for two different labor markets.
00:08
One which is highly skilled and one which is low skilled or here i've written skilled and unskilled.
00:14
So under normal circumstances we have two separate equilibrium occurring you know with their own individual respective supplies and demands or wages and quantities here and here, here, here, in here.
00:33
What we're interested in is what happens if the government starts taxing skilled labor to help subsidize the pay for unskilled labor.
00:40
And so taxes on in the labor market function just like taxes in any other market where some of it is born on the supply or the employer and some of it is born on the demand or the laborer.
00:55
And so in this case what we're going to do is we're going to introduce you know, i mean for the for the sake of argument, it's going to be an arbitrary amount.
01:04
So we're going to say the value of our tax is equal to this much, which as, you know, we've learned, comes into the market as a tax wedge like this.
01:17
And so what this does is it, here let's go back to, or no, we can keep writing in red.
01:25
This is going to shift the equilibrium supply and demand such that the quantity is decreased and the wage that the workers are actually receiving falls from here.
01:43
Let's go to our original equilibrium point, which is here.
01:51
This right here is equal to the wage that after taxes, the, the, the skilled laborers, which is represented by the supply curve, are actually receiving...