Suppose that the wage disributionfor a small town is given below:

Sector Number of Workers Wage($)

A 50 $10/hr

B 25 $5/hr

C 25 $5/hr

Assume a minimum wage law is passed that doesn't affect the market in high-wage sector A but boosts wages to $7 per hour in sector B, the covered sector, while reducing employment to 20. Displaced workers in sector B move into the uncovered sector C, where waged fall to $4.50 per hour as employment grows to 30. Has wage inequality risen or fallen? Explain.