Losses to small business owners from minimum wage increases may be direct losses, such as cutting jobs or hours, or indirect losses—such as rising numbers of job Vacancies, profit declines from increased costs, and price increases by small firm owners. Depending upon the stage of the business cycle, and specific industry/area conditions, these price increases may or may not stick and result in a loss of business
For the question who Gains From Minimum Wage Increases?
In theory, even with adverse employment effects, higher minimum wages might Benefit poor families if the wage gains were concentrated among low- income Workers in low- income families. And it would be useful to assume that all employment losses occurred to young persons from more affluent families. This however, is not the case. According to the Economic Policy Institute , poor women—disproportionately represented in low income households-are most likely to be helped by a minimum wage increase. However, because it takes almost $17,000 to lift a family of four out of poverty, the amount of the minimum wage increase is likely to be insufficient to eradicate poverty by itself.
Let us explore two different pointes of view that were discussed by New York Times magazine in 2005 and 2007....