Economic

To take " Minimum Wage Law " as an example, the intention of this legislation is to elevate the wages of unskilled workers sufficiently to life them from poverty and to protect workers from being exploited by employers that are with excessive market power.

By using a simple labour supply and demand diagram, the equilibrium wage rate will be at the intersection point of demand and supply curve. The min. wage level is set at above the equilibrium wage rate, this will reduce the employment level as wage rate goes up and will increase the production cost of a producer, while on the other hand, increasing the quantity upplied of Labour. Whenever the wage rate is above the equilibrium level, there will be unemployment. And Minimum wage law does lead to an increasing in unemployment rate.