00:01
So i'm going to try to answer this question by drawing a market for teenage labor.
00:04
And again, you know, when you're taking economics courses, this is a tip that i often tell my own students all the time.
00:10
Even if you're not explicitly asked to draw a diagram, try to draw a diagram anyway.
00:15
I promise your instructor will appreciate your efforts, right? so we have a demand for and a supply for teenage labor, right? the demand curve here is firms, people who want to hire teenagers, and the supply curve is teenagers.
00:30
Who want a job.
00:31
So the governor here is saying that the low wages offered by employers in the state have given fewer teenagers the incentive to find summer employment, right? instead of working all summer the way we used to, blah, blah, blah, blah, right? so let's suppose that initially we just have a free market in teenage labor and the price clears at some quantity and some corresponding price.
00:56
But we think that quantity of teenage labor is too low.
00:59
The governor is absolutely right that the wage offered here is too low to get more teenagers into the workforce, right? if you wanted to move up the supply curve and incentivize more supply of labor hours, you would absolutely want to raise the minimum wage, right? but a market is like a dance.
01:20
It takes two participants.
01:22
If we set the new minimum wage up here, what will happen is absolutely...