An urn-ball matching model of the labor market is used to develop a theory of minimum wage compliance or voluntary recognition of unions. Workers can direct their search but, in the absence of wage commitment from the Örms, they have no basis to do so. The default means of wage formation in one-on-one matches is Nash bargaining. When there are multiple applicants competition drives the workers down to their continuation value. By
attracting more applicants, a binding wage áoor provides a means for Örms to increase matching rates and improve match quality. An otherwise poorly enforced minimum wage acts as a commitment device for the payment of more generous wages