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### Structural unemployment is sometimes said to resu…

07:50
Washington University in St Louis

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Problem 8

Consider an economy with two labor markets$-$one for manufacturing workers and one for service workers. Suppose initially that neither is unionized.

a. If manufacturing workers formed a union, what impact would you predict on the wages and employment in manufacturing?

b. How would these changes in the manufacturing labor market affect the supply of labor in the
market for service workers? What would happen to the equilibrium wage and employment in this
labor market?

A. SEE GRAPH
B. SEE GRAPH

## Discussion

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## Video Transcript

um, question eight. Consider an economy with two labor markets, one for manufacturing and one for service workers. We're suppose initially that Nader is union guys and question, eh? If manufacturing workers formed a union white, what impact would you predict on the wages and unemployment in manufacturing? So one of the reason that workers form union you'd perform a union is to raise their wage. So suppose now the original wages. I'm sorry. This is the supplying the man could above labor market off manufacturing order, labor market. So suppose that original wages right here and manufacturing workers now form a union. So they want Teo fight for their rights. They want to ask for a higher wage to provide your family. So? So the new wage a strike for is higher. So this is going to cost this amount of manufacturing mortars to lose their jobs. So So So now we can answer a question. Be because basing that how would this changes in the manufacturing like the market affect the supply of labour in the market for service workers. So all so these unemployed I'm sory. So these are running point workers here. They him they have no choice but to look for other jobs. Right? So they will move to the service market service, worker markets, Teo work. So if the original supply ending man Kurt, look like this for a service walker things. Now we have more workers emigrated from the manufacturing world. We say that the supply off Walker's is going to increase. So this phenomenon is going to decrease the original wage. Since the group when we used to be here it so the rice off supply in labour is going to increase. A sari is going to decrease the wage, but increase the equilibrium equally. Graham quantity. Okay, that's it.