But, based on anecdotal evidence, it seems correct. Most people don't stay in those jobs (high turnover).
Let's say you own a business. You hire two people.If an employer is employing people he doesn't need, then he's either not a very good employer, or has other priorities than simply profit, wouldn't you say?
Minimum wages primarily cut into profit margins. Since this is a marginal shift, prices do not subsequently rise ("passing on the cost to customers"), for fear of losing business to competitors (who will make up the marginal loss with the volume increase). Meanwhile, since low-wage workers tend to spend most of their money, anyway, there is an increase in the velocity of money, to the benefit of the entire economy.
John sits in a chair. This function, while menial, is critical to operations. He gets paid $6.
Bob stands. He gets paid $15.
Then, Gov says you have to pay John $8.
If you want to avoid a profit loss, and you can't raise prices, you lower Bob's wage to $13. Assuming Bob is smart, he quits and goes to work somewhere for $15. In the real world, $15/hr pay isn't that specialized. If you got paid 15 somewhere, you can probably get another job for $15. Maybe you have to start at $12 and then work back up. You get this job at a business that doesn't need "sitters" (ie, low pay workers, generally mainenence), and thus, can afford to pay you 15 instead of 13.
Your business suffers, because you probably can't get the same quality of labor at $13. IRL, maybe you can, but overall, nah.
Overall effect on economy??? for above?
However, your second point sounds right. But the trade-off is bread & butter vs. long term investment. Wealthy investors (who hoarded their earnings) are good for development. And having people to spend $ on said development is...good for development. So, where do the numbers point as to how much should go where? I don't know really. What controls are there in the market?
Wages increases and tax incentives. Raise wages and lower taxes?
Sign me up