That&#x27;s exactly what happens in your story. Wages go down from $P to $P2. Fewer people are willing to work at $P2 than at $P, so employment goes down. That&#x27;s a standard market clearing story.<p>The <i>classical</i> claim is that don&#x27;t have <i>involuntary</i> unemployment - prevailing wage levels equal to $P (in some segment) and simultaneously people unable to find work at $P.<p>Your story agrees with this.