if the low wage earner currently uses subsidies like food stamps, and raising the minimum wage causes those subsidies to become out of reach, then the low wage earner would make a calculation and see if the lost subsidies are higher than the gained minimum wage.
If more subsidies are lost, they are worse off, and thus, would rather stop working and get the maximum subsidies instead.
If minimum wage raise is higher than the subsidies lost, the cost of subsidies is "saved" by the taxpayer. but the businesses paying those wages might not want to pay more, so they might decrease number of jobs as a response. Therefore, you'd end up with more unemployed as a side effect.
Subsidizing people who are out of work while all employees earn a livable wage is a categorically better outcome than having to subsidize everyone, employed or not, just because companies don't feel like paying a livable wage.
> If more subsidies are lost, they are worse off, and thus, would rather stop working and get the maximum subsidies instead.
This is an easily preventable issue that can be avoided by phasing out the subsidies instead of setting a hard cut-off.
If more subsidies are lost, they are worse off, and thus, would rather stop working and get the maximum subsidies instead.
If minimum wage raise is higher than the subsidies lost, the cost of subsidies is "saved" by the taxpayer. but the businesses paying those wages might not want to pay more, so they might decrease number of jobs as a response. Therefore, you'd end up with more unemployed as a side effect.
Neither is a good outcome imho.