Minimum Wage Increase in California

From the Santa Cruz Sentinel:  

Eli Reynolds, a driver at Pizza My Heart, is about to see his pay go up. So is Catherine Yi, a waitress at Clouds restaurant in downtown Santa Cruz.

The state's new minimum, takes effect today, raising pay from $7.50 per hour to $8 per hour.

This is a classic example of Bastiat's "That Which is Seen, and That Which is Not Seen."

In the above minimum wage example, the fact that pay will go up for both Eli Reynolds and Catherine Yi is the seen. This is the visible effect of raising the minimum wage. But what about the unseen?

The California minimum wage was raised to $8 per hour. What happens to Joe Average, who only has the skills to earn $7 per hour? What happens to Suzy Average, who can only be hired at $5 per hour? They must remain unemployed, of course.

But what if there is an employer who's ready and willing to pay Joe Average $7 per hour? And what if Joe Average would take such a job in a heartbeat? Too bad...it's now illegal.

When government fixes prices, you can expect one of two results: Shortages or Surpluses.

If the government fixes a price below the market price, the inevitable result is shortages.

If the government fixes a price above the market price, the result is surpluses.

In this case, the government is fixing wages above the market price for low-skilled individuals...so the inevitable result will be a surplus.

A surplus of what?

Unemployed low-skilled individuals. 

The higher the minimum wage is raised, the larger the number of unemployed will ultimately become. Just imagine if the goverment were to raise the minimum wage to $50 or $100 per hour....How many people would fall into unemployment because they do not have the skills to earn $50 or $100 per hour?