What if labor demand had not shifted after 2007?

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Background

All agree that the quantity of labor fell after 2007 (data from here)

Paul Krugman on the operation of supply and demand after 2007

“If you really believe that the problem is that excessive generosity to the downtrodden is reducing the incentive to work,
so that what we really have is a supply problem rather than a demand problem,
you should expect to see upward pressure on wages.”

Notes

Interpret all total derivatives (d) below as the difference between 2010 and 2007.

Setup

Labor demand is determined by wages w and other factors ad
Labor supply is determined by wages w and other factors as.

equilibrium=d[w,ad]==q==s[w,as];

Actual and hypothetical

act = actual recession: an unknown combination of changes in as and ad. 
hyp = same as act, except with no change in ad.  “Hypothetical”

Result: TheoryGuru disagrees!

TheoryGuru[{"((∂d[w, ad])/(∂w))"<0(* dmd slopes down *),
"((∂s[w, as])/(∂w))">0 (* supply slopes up *),
"((∂d[w, ad])/(∂ad))"==1,"((∂s[w, as])/(∂as))"==1 (* normalize shifters *),
((\[DifferentialD]equilibrium)/(\[DifferentialD]act))(* actual equilibrium *),
((\[DifferentialD]equilibrium)/(\[DifferentialD]hyp)),((\[DifferentialD]as)/(\[DifferentialD]act))==((\[DifferentialD]as)/(\[DifferentialD]hyp)),((\[DifferentialD]ad)/(\[DifferentialD]hyp))==0(* hypothetical equilibrium *),
((\[DifferentialD]q)/(\[DifferentialD]hyp))<(1/2)((\[DifferentialD]q)/(\[DifferentialD]act))<0}, (* quantity actually fell MOSTLY because of supply *)
((\[DifferentialD]w)/(\[DifferentialD]act))>0(* wages actually increased *)]

Graph a counterexample to Krugman’s claim

Namely, an example with
(a) most of the quantity change coming from the supply shift and
(b) the equilibrium wage falls.

SupplyDemandDiagram@@({((\[DifferentialD]as)/(\[DifferentialD]act)),((\[DifferentialD]ad)/(\[DifferentialD]act)),((∂s(w,as))/(∂w)),((∂d(w,ad))/(∂w)),True,1/5,"2007","2010 Actual","2010 Hypothetical demand fixed"}/.
(rexample=TheoryInstanceR[MostRecentAssumption,((\[DifferentialD]w)/(\[DifferentialD]act))<0]))

scaleandround[x_Real]:=Round[((-10)/((\[DifferentialD]q)/(\[DifferentialD]act)))x,.1]/.rexample
(* scale to a total of 10 and round to tenths *)

scaleandround[x_]:=Identity@x

Column[{"Example scaled to total change of -10",
MapAt[Style[#,Red]&,
MapAt[Style[#,{Green,Bold}]&,Map[scaleandround,Framed@Grid[
{{"Due to supply",((\[DifferentialD]q)/(\[DifferentialD]hyp))},
{"Due to demand",((\[DifferentialD]q)/(\[DifferentialD]act))-((\[DifferentialD]q)/(\[DifferentialD]hyp))},
{"Total",((\[DifferentialD]q)/(\[DifferentialD]act))},{"",""},
{"Addendum: total wage change",((\[DifferentialD]w)/(\[DifferentialD]act))}}/.rexample//N,
Alignment->Left,Dividers->{False,{False,False,True,False}}],{4}],
{1,1,1,All}],
{1,1,2,All}]}]

Variable interpretations