Raising the minimum wage is one of the most debated issues in economic policy. Supporters argue that a higher minimum wage increases the income of low-paid workers and can reduce poverty. They also point out that better-paid workers may be less likely to leave their jobs, which reduces the costs employers face in hiring and training new staff. Opponents argue that if wages are forced above the level employers are willing to pay, businesses may hire fewer workers, reduce working hours or raise prices. Small businesses with narrow profit margins are often said to be especially vulnerable. Evidence from studies is mixed. Some research comparing neighbouring regions with different minimum wages has found little or no effect on employment after moderate increases. Other studies suggest that large increases, particularly in areas where average wages are low, may lead to job losses. Many economists therefore argue that the size of the increase, and local economic conditions, matter more than the question of whether the minimum wage should rise at all.

All studies have found that raising the minimum wage leads to job losses.