Additionally, the floor on wages affects the floor on hirable skillset. Employee A is someone who understands how to work effectively and can handle 40 clients

Additionally, the floor on wages affects the floor on hirable skillset. Employee A is someone who understands how to work effectively and can handle 40 clients per hour. Employee B is someone who can only handle 20 clients per hour. In this example, the only reason to hire Employee B is if you can pay them half as much as you pay Employee A. If you pay Employee A $15/hour and you pay Employee B $7.5/hour, then all is well. However, if you have to start paying Employee B $10/hour, then you are better off hiring someone who can handle 27 clients an hour and paying them $10/hour. This is a simplistic example and assumes unlimited supply of labor, but it illustrates the point. The result is that the unskilled end of the spectrum are too expensive in relation to their productivity. These are the ones who end up unemployed. I am not an economist, but that is how I understand it.