I read this article on the PBS website, "Wouldn't a Minimum Wage Hike Lower the Welfare Rolls?" which discussed the potential effects on the economy if the minimum wage is raised.
The article is worth reading, but even more worthwhile is a comment I found on the second page of comments. It's the best explanation I've read on the need and fairness of a higher minimum wage. I don't know the commenter so I couldn't provide a direct link.
From the comments: Michael Moriarty: "Not paying a full-time working a living wage is stealing. In economics, it is called an "externality" and is the equivalent of plugging in your cash register to your neighbor's power outlets. Human labor has a set floor cost to provide. That is, for me to come to work every day, I need a few basic items. I need to be reasonably healthy, reasonably nourished, and reasonably rested. I also need the means of getting to and from work. All these things together effectively should equal the poverty level, that is the level at which one can afford just the basics as far as food, clothing, and shelter are concerned. When an employer pays less than the poverty level for full-time equivalent work, they are dumping the additional cost of meeting the basic needs of providing that labor to the employer on someone else. That someone else is usually society, in the form of food stamps and welfare and the other programs discussed in the article. As a taxpayer, that means the business not paying a living wage is increasing their profits by stealing from me.I didn't know any other way to share the post without copying both paragraphs, I do want Mr. Moriarty to get full credit.
Which is to say that minimum wage is not welfare, it is simply forcing a business to pay the full costs of production. And that is one of the key roles of regulatory bodies in a market economy. If you do not do that, then those who steal will have a competitive advantage that will end up putting out of business every company that does not steal. Without such regulations you have a "takers" economy (or kleptocracy if you prefer), where the best thieves accumulate wealth and destroy it versus having the best producers efficiently employing wealth to create more of it."