Mindful of the recessionary impact of Covid-19, the Conservative government is considering using wage subsidies to maintain employment by encouraging firms to hire and train specific groups of workers. The government is committed to promoting opportunities in the hospitality sector given the extent to which this sector suffered during lockdown. What effect will the wage subsidy to this particular sector - the covered sector - have on the wages that workers receive and on employment in the total labour market, the covered sector and the uncovered sector?