The minimum wage is denoted in the graph above by W_min and the equilibrium wage rate by W^*. In the absence of a minimum wage, the free market forces of supply and demand would balance the labor market at E^* where the quantity of labor demanded equals the quantity of labor supplied. A minimum wage is considered binding because when it is implemented, no one is legally allowed to pay a wage lower than W_min, leading to a surplus of labor in the market. At the level of the minimum wage, W_min, which is higher than the free market equilibrium wage rate, more workers are willing to offer their labor and thus the quantity of labor supplied increases to S_min. But at the minimum wage level, the quantity of labor demanded, D_min, decreases, while the marginal cost of labor for a firm increases. Accordingly, the distance D_min to S_min shown in the graph above is a surplus of unemployed labor in the working area.