(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
In this part you are going to analyze the impact of a 12 dollar minimum wage on unemplyment, labor force, and employment.
(Description)
If the government of Profunctia sets a minimum wage equal to 12 dollars, what will be the level of employment, the size of the labor force, and the unemployment rate? On the Figure there are graphs of labor supply and demand. Horizontal axis corresponds to the quantity of labor (in thousands). Quantity of labor ranges from 0 to 100. Vertical axis corresponds to wage rate (in dollars). Wage rate ranges from 0 to 20 dollars. Two straight lines (supply and demand) are plotted with supply line passing through origin and point with coordinates (100, 20) and demand line passing through points with coordinates (0,20) and (100,0). Lines intersect at point E (50,10). Additional horizontal line at the wage rate level of 12 is plotted reflecting the minimum wage.
(Speaker)
A minimum wage of 12 dollars is above the equilibrium wage rate of 10 dollars. This will creare a surplus of labor at a wage rate of 12 dollars. The firms will demand fewer workers, but there will be more workers willing to work at the higher wage. The level of employment is equal to the quantity of labor demanded at the wage of 12 dollars. For the economy of Profunctia, a minimum wage of 12 dollars will result in 40000 workers employed.
(Description)
If the government of Profunctia sets a minimum wage equal to 12 dollars, what will be the level of employment? On the Figure there are graphs of labor supply and demand. Two straight lines (supply and demand) are plotted with supply line passing through origin and point with coordinates (100, 20) and demand line passing through points with coordinates (0,20) and (100,0). Lines intersect at point E (50,10). Additional horizontal line at the wage rate level of 12 is plotted reflecting the minimum wage. Line parallel to wage rate axis is plotted through the intersection point of demand and minimum wage lines with coordinates (40000, 12). This line intersects with quantity of labor axis at 40000.
(Speaker)
At a wage rate of 12 dollars, more people are willing to work. The labor force is sum of employed and unemployed. At a wage rate of 12 dollars, the economy of Profunctia will have 60000 people willing to work, which will be the labor force.
(Description)
If the government of Profunctia sets a minimum wage equal to 12 dollars, what will be the size of the labor force? On the Figure there are graphs of labor supply and demand. Two straight lines (supply and demand) are plotted with supply line passing through origin and point with coordinates (100, 20) and demand line passing through points with coordinates (0,20) and (100,0). Lines intersect at point E (50,10). Additional horizontal line at the wage rate level of 12 is plotted reflecting the minimum wage. Line parallel to wage rate axis is plotted through the intersection point of demand and minimum wage lines with coordinates (60000, 12). This line intersects with quantity of labor axis at 60000.
(Speaker)
At a minimum wage of 12 dollars, the economy will employ 40000 workers and have a labor force of 60000. This means the economy has 20000 workers unemployed.
(Description)
If the government of Profunctia sets a minimum wage equal to 12 dollars, what will be the unemployment rate? The interval between two intersection points for the minimum wage line with supply and demand lines correspondingly is labeled as "Unemployment rate is equal to fraction, with 60 minus 40 in the numerator and 40 in the denominator, times 100, which is equal to 33.3 percent".
(Speaker)
The unemployment rate is number of workers unemployed divided by the labor force. At a wage rate of 12 dollars, Profunctia will have an unemployment rate of 20 divided by 60, equals 0.33 or 33.3 percent.