through immigration and through natural increases Such increases tend, all other determinants of wages unchanged, to reduce wages The fact that wages have tended to rise suggests that demand has, in general, increased more rapidly than supply Still, the more supply rises, the smaller the increase in wages will be, even if demand is rising Finally, Panel (d) of Figure 12.11 "Changes in the Demand for and Supply of Labor" shows the impact of a reduction in labor supply One dramatic example of a drop in the labor supply was caused by a reduction in population after the outbreak of bubonic plague in Europe in 1348—the so-called Black Death The plague killed about one-third of the people of Europe within a few years, shifting the supply curve for labor sharply to the left Wages doubled during the period [1] The fact that a reduction in the supply of labor tends to increase wages explains efforts by some employee groups to reduce labor supply Members of certain professions have successfully promoted strict licensing requirements to limit the number of people who can enter the profession—U.S physicians have been particularly successful in this effort Unions often seek restrictions in immigration in an effort to reduce the supply of labor and thereby boost wages Competitive Labor Markets and the Minimum Wage The Case in Point on technology and the wage gap points to an important social problem Changes in technology boost the demand for highly educated workers In turn, the resulting wage premium for more highly educated workers is a signal that encourages people to acquire more Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 659