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The employers who would have profited by the employment of the now disemployed are worse off.
D], and this disemployed labor is worse off by the area labeled "Loss from eliminated jobs.
on average the value of leisure for disemployed workers is zero.
We assign a value of zero to leisure time gained by the disemployed because current antipoverty policy is oriented toward getting people into, not out of, the workplace.
This increase in earnings is more than offset by the losses of the disemployed, which amounts to over $304 thousand, and the losses of the employer, who experiences increased costs of $1.
7 million, but this is more than offset by the sum of losses to the disemployed of over $3.
Answer: No, they must pay higher wages than before and lose the profits they would have earned on the marginal workers who are now disemployed.
Losses to disemployed workers in Market One are areas H + J (if leisure is not valued).
The loss to employers is B + D + C + E + I, and the loss to the disemployed is F + G + H + J.
Alternatively, some workers who become disemployed because of minimum wage increases may become eligible for government transfers, which could mitigate the negative effects of minimum wages on the total income of some families; wage increases could also lower transfers to some families.