Angel E Castillo
Seems like you've got a lot of normative economics questions! Let's talk this
through and you can decide.
Wo
Let's stick to interpreting the graph and assume that LO* people had jobs
before the minimum wage was established. Now, with the minimum wage,
LDmw people have jobs.
Ava
So, according to the graph some people lost their jobs.
Angel E Castillo
When the wage rose, firms decreased their quantity of labor demanded.
Ava
Well, that's bad! What happened to the people who kept their jobs?
Their wage rose from Wo* to the minimum wage.
Their wage didn't change.
Their wage fell from the minimum wage to Wo*.