If you accept that a small increase in the minimum wage will have some small negative effect on employment, then you need to consider the nature of the trade-off involved. Those who remain employed—and most workers will remain employed if the minimum wage increase is small—will enjoy the benefits of the higher wage and will thank the politicians who gave it to them. Those who lose employment will, most likely, not even realize that the minimum wage is the cause. Why? Because most firms will adjust by letting attrition run down staff size. Most minimum wage jobs are in industries with high turnover. Thus, few workers are fired; instead, some are not hired to replace workers turning over. Workers not hired are unlikely to have any idea as to the reason.

Who are the workers not hired? They are the least skilled, most disadvantaged members of society. The bottom line is that those who advocate an increase in the minimum wage are willing to trade the higher wages of those who remain employed for reduced employment opportunities for the least skilled.

Having a healthy debate about the ethics of an increased minimum wage. It’s another feel-good concept in theory but one that undermines those on the margins whose productivity does not match the higher minimum.

via Minimum Wage and Unemployment | Cato @ Liberty.