theres a lot of uneducated drivel flying around on both sides of this debate.
one of the best quotes of the thread:
<< You don't lift a person up by artificially increasing the worth of his labor. You lift him up by teaching him a skill that makes his labor worth more. >>
this is important because it points something out: money is NOT worth ANYTHING. you can't it eat, you can't wear it, you can't hide under it during a rainstorm. it is simply a good that makes it so we don't have to barter. at best something unexpected could raise/lower the real value of money in the short term, but only innovation or education can raise the real value of labor or capital in the long term.
minimum wage is not innovation or education. it does nothing to increase the real value of a person's hourly output.
that said, there is a purpose for the minimum wage, and thats too control the supply of labor to minimum wage jobs. the minimum wage law says that minimum wage is to be set at the point where workers on it earn the most total money. that is, that if the minimum wage were lower, then it could be raised and not enough people would be fired to offset the gain in income by everyone who kept their job. eventually this aggregate earnings curve peaks, and then if the wage is raised firing offsets the increase in the wage of everyone that kept their job. that is a pretty reasonable place to keep the minimum wage at. problem is, its impossible to figure out where that point is, and its certainly not uniform for the whole country.
now there is the famous study done on aggregate employment numbers among people with minimal skills jobs in 1990-1991. this is one of the worst studies to use for anything. it is worthless. why? because it does not take into account the bush recession. of course the employment figures were down, we were in a recession!
in fact, the best anyone can make out raising the minimum wage has never had an immediate effect on the economy, and if you try to enlarge the time period you get far too many variables to deal with. there are a couple of reasons that minimum wage hikes don't have any noticeable effect. first is that everyone knows they are coming. it takes the law a while to pass through congress and the pres, and the law doesn't go into effect for a time period after that. so by the time the law actually goes into effect any adjustment has been made. most studies center on before and after the wage hike actually takes place, it would be better on before and after the bill is likely to pass. the second reason, and possibly a more convincing one, is that minimum wage hikes are not proposed during times when business is hurting. they are proposed when nice profits are being made, the labor market is becoming tighter, and wages are rising. the current round of raising the minimum to $6+ started while minimum-skills jobs were going for $8+. if you implement a floor at $6 when the market is clearing at $8 then you're not changing anything out in the real world.