00:01
For this question, we want to know what happens to wages and employment when the baby boomer generation retires.
00:06
So first, what we want to realize is that this is going to affect the labor market.
00:11
So we're going to want to draw a market that we can play with on the graph to see what happens.
00:17
So up here will be wages on the y -axis, and then you'll have employment on x -axis, or quantity of labor or hours work that companies are demanding.
00:33
So in this graph, we're going to have labor supply, which is how much workers want to work, and then labor demand, which is how much companies want to hire workers.
00:45
So when we think about something impacting the labor market, we want to think about if it will impact labor supply or labor demand.
00:52
Since this is people retiring, that's going to decrease the amount of labor is available, so we're going to shift supply of labor to the left.
01:02
So what that means is, well, first let's put, so our initial equilibrium, is right here.
01:07
So our initial, we have this quantity of labor employed, and then we have this original wage...