Suppose that at the equilibrium wages the number of employed skilled and unskilled individuals is greater than zero, i.e. Ms > 0 and Mu > 0. The government decides to introduce a minimum wage w which is higher than the equilibrium wage of the unskilled workers, but lower than the equilibrium wage of the skilled workers, i.e. w u < w < w s , where w s and w u are the equilibrium wages of skilled and unskilled workers.