I mean, it's not a complicated concept. If we set the minimum wage at some arbitrarily high figure, say, $200 dollars an hour, it's fairly obvious that most people wouldn't be hired. If a firm hires a worker who is capable of producing $10 worth of goods in an hour, but has to pay $200 an hour for them, they're making a profit of -$190 and will just not hire that worker to begin with. In general, anyone who is capable of producing in an hour output of less value than the minimum wage logically won't be hired by employees in a minimum wage system.



There's strong reasons for the minimum wage, but the claim above is probably a true one. You can't brush it away by saying "bullshit Friedman". Friedman provides some strong arguments in the various papers he published (not his books, which are obviously intended for a general audience and are thus more based on narrative exposition), and his work is one of the starting points for modern economists looking at employment today. I say that not because he's right, but because knowledge of how and why he went wrong is important to understand for economists when the basics of his model are almost certainly correct. By understanding properly why his conclusion doesn't seem to be true, we can build more accurate models of employment. Simply calling him a 'bullshit economist' because he was wrong is grossly unfair, and is akin to calling Robert Boyle a 'bullshit scientist' because he made a lot of incorrect assumptions about the nature of various chemicals.



A proper rebuttal to Friedman's argument is that it assumes that, in the absence of the minimum wage, the market equilibrates anyway. As it is, there are a number of reasons why people who can produce $10 in an hour are only paid $8 hour. Note that this means that if you raised the minimum wage to $10 an hour, employment would not change. Employees would be willing to pay these people $10 an hour - they still make profit or do not make a loss - but for some reason they're also capable of paying these people less than they are actually worth, which is obviously what they're going to do first because it's beneficial for them.



There's a number of reasons why employers are capable of doing this, but the main one is monopsony - the number of employers is far smaller than the number of employees, so the impact of an individual employer's hiring practices has a relatively large effect on the market. They're under less competition, effectively, so the bargaining power is strongly tilted in favour of firms. Given this, there's a strong argument supported by empirical evidence that says raising the minimum wage has no effect on the employment of a certain amount of people - those who were producing above the value of the minimum wage but for various reasons were being paid less.



Note this doesn't make the minimum wage a cure-all. We can split the effect of raising the minimum wage by looking at a number of different groups - those who were producing above the new value but being less than the new value will be better off. However, those who were producing above the old value but less than the new value probably are going to become unemployed - as Friedman says, so he was at least partially correct. It's just, the impact of this is masked by the effects of what is basically restoring bargaining power to another groups of workers and ensuring they do get the pay they deserve. At this point, our choice becomes both an empirical one (how many people get made better off and how many people worse off?) and a normative one (which group of people would we prefer to see better off? If we accept making one group worse off in this way, is there anything we can do to make them better off in another way?). For the most part, the minimum wage probably does a great deal of good at the lower end. The simple reason for that is that it's probably quite hard to be so unproductive you can't produce at least $10 of value in an hour: not impossible, certainly, but even particularly incapable workers can do things that we only wish machines and robots could be applied to: humans are great at doing stuff in general. That would suggest most people being paid particularly low-wages are usually, if not exclusively, being paid so because companies are exploiting them.