formula_19If formula_5 represents a minimum wage that applies to all workers, this equation completely determines the equilibrium value of the labor market tightness formula_9. There are two conditions associated with the matching function:formula_22This implies that formula_9 is a decreasing function of the minimum wage formula_5, and so is the job finding rate formula_25. A hike in the minimum wage degrades the profitability of a job, so firms post fewer vacancies and the job finding rate falls off. Now let's rewrite formula_26 to be:formula_27Using the relationship between the wage and labor market tightness to eliminate the wage from the last equation gives us: