The article I stumbled upon while browsing CNN perfectly coincided with our current studies in microeconomics. A binding price floor (price set above market equilibrium) causes an excess of labour (unemployment). Cost of labour to firms rise, who have no choice but to eliminate workers and increase the workload of existing workers to match previous levels of production. Workers fortunate enough to keep their jobs are beneficiaries. Firms, workers laid off, and those unable to find jobs in this new market, are the losers. The government has caused a disequilibrium (demand of labour exceeds supply of labour).

Eight states in the U.S. have announced minimum wage increases. The U.S.A. is in a sticky situation at the moment. On one hand, the federal minimum wage ($7.25/hr) amounts to $15,000/yr for a full-time worker, below the poverty rate for a family of four. These struggling families would be winners. On the flip side, 6.9 million jobs were lost during the recession, with minimum wages driving this number up. Spending will get the economy going, but increasing the minimum wage creates joblessness, further compounding the problem. The American government must collaborate with economists to develop both short-term and long-term solutions, avoiding social unrest.