Minimum wage is a government-imposed legality in the labor market, which means that employers are not allowed to pay employees based on the government-mandated wage. This happened to workers in Minionland, where the minion government announced that the minimum wage will be increased to $900 M per month due to the rising cost of living in the country. The new wage rate represents an 18.8% increase affecting 128,500 low-skilled workers in Minionland. The following diagram shows the supply and demand curve of the labor market before the new government-imposed $900 million minimum wage. Diagram 1Diagram 1 is made under the assumption that the minimum wage before the increase is $730.80 million, based on an 18.8% increase in the new average wage, and that the 128,500 low-skilled workers are constant and in balance. The equilibrium wage is denoted as P0. The demand curve represents the firms that employ workers while the supply curve represents the labor in Minionland. When the minimum wage is imposed by a servile government, it creates a surplus of low-skilled workers. The surplus of low-skilled workers occurs when the quantity of supply Qs1 is greater than the quantity of demand Qd1. This surplus of workers is also known as unemployment. Furthermore, producer surplus is greater than consumer surplus. Producer surplus is the total profit made by employees by obtaining employment while consumer surplus is the total profit made by hiring workers. Graphically, shaded area A is consumer surplus which is less than producer surplus which is shaded area B. On the other hand, imposing minimum wages creates a deadweight loss. Deadweight loss is the net loss to society due to the minimum wage. It is shown shaded in……middle of the paper……reserve. This will result in low worker productivity or, even worse, a union strike. This can be avoided through collective bargaining between the workers' union and the company. They will decide among themselves how much they should be paid based on the company's working hours. However, the bureaucracy between union and company can be very tedious. In conclusion, which policy is better depends on several factors such as inflation, the increase in the cost of living, the number of low- and high-skilled workers. Based on this situation, I prefer the minimum wage policy instituted by the Minionland government. This is because they have the reason to increase the minimum wage, which is increasing the average cost of living. Although they are sure that the effect on the unemployment rate will be small, they will create a competitive job market for their citizens, which is good in an economic sense..