There’s a push to raise the minimum wage to 15 bucks an hour. Of course, the actual cost to an employer will be greater. For example, the employer’s share of the FICA tax on $15 is 93 cents, and there will be other additional expenses. But for the this exercise, let’s use $15.93 an hour as the employer’s cost. What will happen to a marginally skilled employee who provides less than $15.93 of value to the business and whose presence is a net loss to the employer?
Let’s not always see the same hands.
The real effect of a minimum wage is not to make it illegal to pay workers less than some arbitrary wage. Instead, it outlaws the participation of marginally skilled workers in the on-the-books economy, forcing them to work in the shadow economy.
BTW, some politicians see that result as a feature rather than a bug.