According to the Associated Press, on March 7, the Senate defeated two bills designed to increase the minimum wage. Senator John Sununu voiced his argument against the wage increase, "when you raise the minimum wage you are pricing some workers out of the market." In macroeconomics we learned that as the minimum wage increases the unemployment rate also increases. Is this true? If somehow these minimum wage bills do get passed will it hurt the economy?
A minimum wage increase could make it more difficult for employers to hire unskilled workers. How could this minimum wage hike effect firms? Everybody who is paid minimum wage would like an increase, but I think it could possibly cause more negative effects on the economy than positive. What is your opinion? Are the macroeconomics books telling us the truth?