Question

I need help figuring out how to model this below:

The Hay formula adjusts pay for "know-how," which they measure by the investments of formal education and training required to perform the job. Suppose that a regulatory body increases job requirements for lab technicians. Instead of an associate's degree, they now require a bachelor's degree and certification. How does it shift the labor supply and/or labor demand curve? And what effect will this have on quantity and pay for this job? :

The labor supply and demand curve both shift to the left. The quantity will decline and the price will increase.

[label a, b, c, d; add a line/lines the figure to illustrate the supply or demand, and explain]

Answer 1

a= labor wage rate

b= labor supply curve

c= labor demand curve

d= quantity of labor.

The labor demand curve would shift to the right and the supply curve would shift to left. As new job requirements are coming up, the demand increases but now the criteria for joining these posts change and many may not have these new qualifications. Hence, fewer can apply now and so the supply of labor would shift left. Thus, the wage rate would increase but the quantity would decrease. Even if new job openings are there, but now the same job would require a much higher degree so in all it would reduce the labor employed.