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There are a lot of things to consider when we talking about raising the minimum wage. We also need to look at the difference between short and long term effects. The biggest argument against raising the minimum wage is that many low skilled workers will lose their jobs. This is true, I know because I was the guy who had to eliminate half the positions we used to offer to high school kids as summer jobs the last time they raised it.

By taking the free market out of the job market, we make every employer who has minimum wage earners and near minimum wage earners, decide who they will keep and who they will get rid of. Some may choose to simply take a loss, for a while or not give raises to their higher paid employees, and then thin the ranks by not replacing those who leave. Either way, in the short term, there are less jobs.

Fortunately, the people hardest hit by this cut are usually high school students and mercy hires who usually have an alternate support structure somewhere along the way. Most truly competent adult workers are making more than minimum wage anyway, but if we raise the minimum wage too much, they will start to get cut too.

Also hit hard are small businesses who often rely on students and young workers to do a lot of their grunt work and unskilled work. Some of these businesses will go out of business when you raise the minimum wage on them. Others will simply adapt to circumstances. Larger businesses with larger cash flow will have more ability to adapt, and may be able to take a short term loss, but come out on the other side of things as a stronger business. So now that we all get the short term effects, which I don't think there is much debate on, lets look at the long term effects which may actually be more positive for business, although not stellar for the American worker.

Labor is one of the largest expenses of most businesses. Aside from actually cutting the check to the employee, there are huge expenses associated with having the employees. These include Insurance, workman comp, Healthcare, the cost of operating a HR department, additional taxes, and structural requirements, like break rooms, coffee pots, OSHA required safety equipment etc. So when a business is having trouble, the first thing to go are the employees or their benefits. The first people to go are the deadwood employees. These are the ones who don't provide a lot of benefit to the company, but are kept on the payroll to avoid firing them. Then are the less essential positions.

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