THE MINIMUM WAGE An important example of a price floor is the mininum wage. Minimurrr-wage laws dictate the lowest price for labor that any employer may pay. The U.S. Congress fust instituted a minimum wage with the Fair Labor Standards Act of 1938 to ensure workers a rninimally adequate standard of living. In 2018, the minimum wage according to federal law was $7.25 per hour. In addition, many states and cities mandate mjnimum wages above the federal level. The minimr:m wage in Seaiile, for instance, was $15 per hour in 2018. Most European nations also have laws that establish a minimum wage, often much higher than in the United States. For example, even though the average income in France is almost 30 percent lower thart it is in the United States, ihe French rrrinimum wage is more than 30 percent higher. To examine the effects of a minimr:rn wage, we must consider the market for labor. Panel (a) of Figure 5 shows the labor market, which, like all markets, is subject to the forces of supply and demand. Workers supply labor, and firms demand labor If the govemment doesn't intervene, the wage adjusts to balance labor supp1y and labor demand