Members of Congress assumed that if the minimum wage were raised, all
workers would retain their jobs. But this is not the case. An increase to $7.25 an
hour, plus the mandatory employer's share of Social Security, unemployment
insurance, and workers' compensation taxes, brings the hourly employer cost
close to $8, even without any benefits.
With the minimum wage increase, employers only hire workers who can
produce $8.00 an hour of goods or services. That is fewer people than they
employ today. As the recovery progresses, employers are changing technologies
or hiring more skilled workers to keep their firms in business.