00:01
Okay, so we are going to be looking at a scenario.
00:04
We are given a general statement about government policy that most government policy decisions have winners and losers.
00:13
Now we're going to be specifically looking here at the effect of a minimum wage.
00:19
And if this is imposed, we want to look at a situation of who benefits and who does not benefit from this.
00:34
Who are the winners? who are the losers? okay, so the first thing we're going to do is to look at a diagram that can help us understand the impact of a minimum wage.
00:49
If you're going to be having the supply of labour and the demand for labour, and we have the quantity of labor as well as the wage rate.
01:04
We can actually see from the diagram that we have an equilibrium wage rate, which is called w .e and equilibrium quantity of labor.
01:17
Now, if the minimum wage is to be set above the, if it's to be set above the equilibrium, as in this particular instance, we'll just call it wm for minimum wage.
01:34
We can actually see here in the diagram that there's going to be excess supply.
01:40
So there's going to be excess supply of labor and basically supply outstrips demand.
01:49
And this particular instance, because remember, it is the businesses that demand labor.
01:54
And it is the people that just supply labor, the general populace.
01:58
So this becomes like a surplus in terms of the availability of labour.
02:06
So the question basically is who are the winners, who are the losers in this particular incident? a good analysis that we can draw from basically could be looking at it from the point of view of pest, as in the acronym for political.
02:30
So we're going to just run through pest quickly as an analysis tool.
02:37
So to just try to find out who are the likely winners and losers when minimum wage is imposed...