A shortage of unskilled labor will occur if the minimum wage is set below the equilibrium wage in the unskilled labor market.

Question

Quizplus · Accepted Answer

A shortage of unskilled labor will occur if the minimum wage is set above the equilibrium wage in the unskilled labor market, not below it. Setting the minimum wage below the equilibrium wage would not have a significant effect on the labor market, as employers would still be able to hire workers at the going wage rate.

A Shortage of Unskilled Labor Will Occur If the Minimum