Minimum wage refers to government legislation that establishes the lowest hourly rate employers must pay workers, acting as a price floor in the labor market.

• This policy aims to protect low-wage employees by ensuring they earn enough to afford a basic standard of living.
• It can help alleviate income inequality by raising earnings for those at the lower end of the wage scale.
• However, if set above the equilibrium wage, it may cause labor market disequilibrium, potentially leading to unemployment among unskilled workers.