As for the minimum wage, it will cause two things: A. By setting a price floor on labor, the Feds are causing the market to go out of equilibrium. Because some low skill workers aren't worth 10.10 an hour(or even 7.50, in the case of many farm workers) the minimum wage causes higher unemployment...
Myth: Raising the minimum wage costs jobs.
This is one place where conservative ideology is clearly refuted by looking at what actually happens. When you have states next to each other, and one raises the minimum wage while the other does not, you can compare the results.
It might seem obvious to people that raising wages will cause companies to hire fewer people. But not when you think it through. Well-run companies employ the right number of people to handle the demand for the goods or services they produce. They don’t just have extra people sitting around reading the newspaper, who they will lay off if they have to pay a couple of dollars more an hour.
Picture a store with only one cashier and 20 people in line. Pretty soon people get impatient and leave. A sensible manager is going to put the right number of cashiers at the checkout lanes to handle the number of customers in the store.
In Australia the minimum wage is $16.68 and the unemployment rate is 5.8 percent. In the U.S. the minimum wage is $7.25 and unemployment is down to 6.7 percent, but is falling largely due to people leaving the labor force because they just can’t find work. This is not to say that the unemployment rates in Australia and the U.S. are different because of the difference in the minimum wage, but it does show that the high Australian minimum wage has hardly crashed Australia’s economy.
Myth: Raising the minimum wage hurts small businesses.
Conservatives like New Jersey Governor Chris Christie say that raising the minimum wage would hurt small business owners. The truth is that most minimum-wage workers do not work for small businesses. According to Think Progress: “The majority (66 percent) of low‐wage workers are not employed by small businesses, but rather by large corporations with over 100 employees.” Also “The three largest employers of minimum wage workers [are], Walmart, Yum! Brands (Pizza Hut, Taco Bell, and KFC), and McDonald’s.”
Last February, BusinessWeek debunked the “hurts small business” claim, writing, “a growing number of small business advocates support a hike.”
“That includes dozens of business groups and networks composed primarily of small business owners such as the Main Street Alliance, the National Latino Farmers & Ranchers Trade Association, and the Greater New York Chamber of Commerce. ‘Our women [business owners] who pay a living wage have an advantage over their larger counterparts who don’t,’ says Margot Dorfman, chief executive officer of the U.S. Women’s Chamber of Commerce, an organization with 500,000 members, three-quarters of whom are small business owners. ‘Whether Obama’s proposal is high enough or the time frame is fast enough is the question.'”
The should-be-obvious reason? “If the customer base is undermined because wages are so low, they feel it directly.”