Problem
The city of Minneapolis is deciding whether to raise the minimum wage. You are an economist who was commissioned to advise the city about the pros and cons of this policy.
1. Explain, with a supply-demand model, why this may have a negative impact on employment. Be clear about the number of people who want a job versus the number of jobs available.
2. Explain briefly (no need for model) why we may not observe any negative effect on employment.