The dynamics are considerably more complicated when you consider massive public policy decisions that affect the labor market, like changing the minimum wage. W

The dynamics are considerably more complicated when you consider massive public policy decisions that affect the labor market, like changing the minimum wage. When you're pricing widgets, you can look at marginal value add and have it make sense. When you're talking about the floor of the labor market, you're really talking about economy-wide effects. The main knock-on effect of raising the minimum wage should be inflation; most labor costs (at least those that get built into consumer prices) are in some way linked to the minimum wage (either explicitly, or because of implicit pay scales). So yeah, there are considerations. But it's not that kind of mechanical, subtract-marginal-value-of-employee kind of considerations. Unfortunately, economies are big and complex and require sophisticated models (they can be simple -- but they should be sophisticated).