The wage for unskilled labor is presently about $5 per hour. Suppose a law is passed raising the legal minimum wage to $6 per hour. Treating labor as a commodity traded in the economy at some price (wage), determined by the supply and demand for various types of labor, answer the following:

a. Price floors create surpluses. What do we call the surplus created in this market?

b. What types of workers are likely to be most affected by this law, e.g.. teenagers, skilled craftspersons, handicapped workers, etc.?

c. Consider that unionized workers generally earn much more than the min- imum wage (skilled construction workers earn approximately $20.00 per hour, on average). Unions, however, have always strongly advocated increases in the minimum wage. What self-interest might the unions have in this regard?