Supply and demand applies to labor, too. Minimum wage hikes always mean jobs will be lost. It is, however, quite arguable that the benefit to the economy we get because minimum wage workers have more income to spend offsets and possibly outweighs the detriment of those lost jobs. But it's not cut and dry and even though it is arguable, it is almost impossible to prove.
The CBO seemed to just fine.
https://www.cbo.gov/publication/44995
And the effects are common sense.
Too many people think (not saying you are one of them) that when you drastically raise the minimum wage that it only effects the burger-flipper types. Not true. IT ripples through much of the entire economy.
But it is economic common sense. If you raise the minimum wage from say $7.25/hr. to $9.00/hr., then you have to raise a WHOLE bunch of people's wages that have nothing to do with the minimum wage.
Take a large factory. IF you raise Jake's pay from $7.25/hr. to $9/hr. - suddenly, Lauren - who was making $9/hr. is getting paid the same as the far more inexperienced and less capable Jake. So, now the company has to raise Lauren's pay to about $10.50 an hour just to keep the gap going. But now Steve - who was making $10.50 - is getting paid the same as his subordinate (Lauren). So you have to raise his pay to $12/hr..
And so on up the pay chain, so that almost everyone in the company has to get a pay raise or have a worker's revolt from everyone except the minimum wage people.
And that is what you would have all across America. You cannot just force minimum wage up by roughly 25% (without any increase in productivity, btw) and have no ripple effects.
So, this means virtually everything manufacturered or serviced in America will go up in price as the extra pay raises work their way through the country.
But remember, there is ZERO increase in productivity...so these products/services are no better...just more expensive. But since foreign countries that import those goods into America had no such increase in pay, then that instantly makes American-made products even less competitive with imports then they already were. That hurts sales. And that causes layoffs at those American manufacturers. And probably causes increased hiring at foreign manufacturers that import to America.
Sure, the minimum wage people have more pay - but they are not idiots. They are going to buy the product that gives them the most for their dollars. And since American goods are now more expensive - but no better - since the big pay raise, then this new found pay will increasingly go offshore.
On top of all that, those on fixed incomes - like the poor and seniors - are going to be hurt by all this since the cost of American goods and services will go up (you cannot just raise production costs substantially with no increase in prices). So the government will have to step in and give them more handouts to makeup for the dwindling amount they can now buy. And this hurts taxpayers as they have to finance this added welfare.
Nothing is free in life. You cannot magically force people to pay employees more money - with no added increase in productivity - and magically get a better life for everyone. Life just does not work like that.
It could maybe work (to a point - for a while) if the whole world had the same minimum wage. But it does not and all a huge increase in the U.S. minimum wage will do primarily (imo) is a) make U.S. goods and services more expensive and b) force more U.S. consumer dollars off shore to less expensive imported goods manufacturers.
