Obama’s proposed minimum wage would be higher than all but one state (Washington), meaning it could have a particularly disruptive impact because it wouldn’t take into account the differences among local labor markets.
If unemployment were quite low, the economy were expanding rapidly, and employers were having trouble finding workers, then an increase in the minimum wage might not do as much damage. But this is less likely under current circumstances, with the economy growing slowly and unemployment at 7.9 percent.
Also, next year, the major provisions of the national health care law will be implemented. Already, fast-food and chain restaurants have been announcing plans to cut back worker hours to avoid the federal penalty for not providing government-approved health insurance. To them, an increase in the minimum wage on top of the health care mandate would be another incentive to cut back on their workforce.