Minimum wage is always raised above equilibrium rate. Currently there are many people working for minimum wage. They all will be affected by an increase in the wage.
Wrong. Some will risk losing their jobs.
As to it leading to job losses, again, there is no evidence for it. You don’t see businesses squawking when minimum wage is raised. And businesses are not exactly wall flowers; they make a big stink when they are adversely affected.
That's usually because in most cases the minimum wage is raised just pennies above the equilibrium rate. As a result, most get no benefit from it, and few lose from it. Now if you should raise the minimum wage significantly, it would be a whole different story. Then many would lose their jobs, or more likely some will work under the table. Statistics for illegal activities are hard to come by precisely because they're under the table. I've heard a number of stories of people working under the table. Why would an employer want to hire under the table? Replace the minimum wage with co-determination laws and better education for all, and suddenly not only would wages rise, but also an employer's activities would be more transparent to his staff, making it more difficult for him to hire under the table.
Now as for evidence, Socrates had no proof that there were pores in our skin, but he could deduct that if we sweat, the only way the water could go through our skin is if there were holes in it. In like manner, we can deduct that there will always be an equilibrium rate for work in exchange for money. It's logical therefore that those not willing to pay the new minimum wage will lay the worker off, fire him, or possibly even fire him and then rehire him under the table. I would be interested in seeing the statistics, and if the raise in the minimum wage is in fact effectively above the equilibrium rate, that people would lose their jobs. And if not, that there would be no significant change to overall wages, rendering the raise essentially useless. No proof is needed for that, only logic. A minimum wage is an arbitrary price floor.
And it is only a very near sighted employer who will cut staff because minimum wage is raised. Let us say minimum wage goes up by 50 cents an hour. Employer costs go up by 1000 $ per year. Why would an employer reduce staff because of that?
Because prior to that his employee was making him just enough to make it worthwhile hiring him. If that's the case, then we'd just legislated that worker out of a job. Or, alternatively, if that employer is making a killing out of that employee, he'll laugh the law in the face, pay the minimum wage, and continue to exploit the worker if he should have somehow monopolized the worker's employment options.
With co-determination laws, minus a minimum wage, the first employee would get to keep his job and the second would have more power to negotiate a fairer deal. Then the question becomes: How to we raise the poorer worker's standard of living? Simple: provide him with a quality education so that he will have something of more value to offer to his employer.
And if there is no business slowdown, if he is getting the same amount of business, how is reducing staff going to help him cope with the business?
Again, if business is booming and he's making a killing of his minimum wage staff, then he might very well just laugh the minimum wage in the face, pay it, and continue exploiting that staff if he'd somehow monopolized their employment options, which could be the case in some cases, especially in smaller or more isolated towns, or where the worker has more limited access to transportation to seek better jobs farther away, etc. Again, co-determination legislation would then prove much more valuable in that it would allow those workers to negotiate above minimum wage. And if this is not the case, and the worker's previous salary made it just worth while keeping him, then we'll have just legislated him out of work.
Employers make most of staff reduction because demand is falling, rather than because minimum wage is raised.
Falling demand can really hurt the business. But there is no evidence that minimum wage hurts the businesses.
Not necessarily. It's a proportional scale. Let's say business grows by 1% but the minimum wage is doubled or even tripled. What do you think will happen to those workers? They're out of a job. Inversely, let's say profits quadruple and the minimum wage is raised by 1%. They all get to keep their jobs, and the employer is laughing in the face of the minimum wage laws, unless of course the workers do have other employment options, in which case they'll be more able to negotiate well above the minimum wage, thus rendering it useless to them. So again, either it puts you out of work, or it's of no value to you anyway. So either it does nothing for you, or it hurts you.
And of course it is possible that some employers will reduce staff out of sheer cussedness.
Again, not necessarily. Let's say yo're employer hiring me at minimum wage, and I'm making you just enough money to pay my wage, cover all the legal and administrative costs relating to me, and make you a barely reasonable profit. You'll keep me because, though I'm not very useful to you, I'm still useful enough, albeit barely. In that case, even the slightest raise in the minimum wage will force you to lay me off not because you hate me, but because my position was fragile already (maybe you were keeping me in part since I was making you a small profit, and in part out of compassion). Had the minimum wage not been raised, you might have kept me. Now that it's raised, the profit motive is gone. Even if you don't lay me off right away out of compassion, you will eventually, or alternatively will not hire another like me, allowing me to keep my job, but having legislated a new high school graduate out of the market. So we have to consider not only layoffs, but also the drop in new hires.
It may lead to a few (though insignificant amount) of job losses.
A few is a few. Job loss can be tragic when a person needs money to live. It's not statistics, or should I say those who lose their jobs ARE the statistics. Small as it may be, it's a tragedy.
However, when you consider that most minimum wage employees will be better off, I think the trade off is worth it.
What? Better off out of a job? Again, even if they keep their job, we have to consider those entering the job market too. And again, co-determination laws would allow them to negotiate a fair wage on their own.
The only time I could defend minimum wage laws would be if they were attached to direct government assistance. In other words, if a person goes to an employer, and that employer refuses to hire him specifically because of the minimum wage laws (i.e. not because the employer simply does not need staff regardless of salary, or because that worker is lazy, or smelly, etc.), he could always request a letter from the employer to that effect, present it to the government, and the government would be legally bound, seeing that its own legislation put him out of work, to pay for his education (and pay him minimum wage while he's there, seeing that as per their own laws he's entitled to it) so as to make him worth minimum wage or above. In any other case I could not accept minimum wage laws. Power comes with responsibility. If the government has the right to enforce minimum wage laws, then it also has the duty to compensate those who are hurt by these laws. The two must go hand in hand, but unfortunately they don't.
In Sweden, the government provides quality education for all, including the unemployed. Germany has co-determination laws allowing workers to negotiate fair wages. In both of these cases, minimum wage laws become unnecessary, though as I'd mentioned above, I don't know if Germany has minimum wage legislation or not.