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When a Minimum-Wage Law Forces the Wage to Remain Above

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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.


Definitions:

Depository Bank

A financial institution where deposits are made, held, and managed; also facilitates financial transactions for clients.

Settlement

An agreement reached between parties in a dispute, where usually one party agrees to provide compensation to the other, ending the dispute outside of court.

Creditor

An individual, company, or institution to whom money is owed by another party, the debtor.

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