Fred Foldvary wrote:   
> raising the minimum wage today has support among much of   
> the population, and some (probably a minority of)   
> economists, who think this would generally improve the   
> status of low-income families.  I presume most economists   
> today would regard that proposition as a fallacy.   
  
  
The "minimum wage fallacy" is the deduction of welfare   
effects for low-income families from (often implicit) models   
lacking institutional detail and, at a minimum, some   
evidence on the elasticity of demand for minimum wage labor   
(much of which is part-time, so that fewer hours purchased   
need not translate directly to fewer workers hired).  
  
The fallacy often manifests in statements like "economic   
theory shows that raising the minimum wage will hurt   
low-income families by increasing their unemployment".  
  
Even though the theory invoked is generally   
principles-level, the claim is still fallacious.  While it   
is common in principles courses to demonstrate that in   
competitive markets a minimum wage lowers the amount   
unskilled labor hours hired and to call that (without   
warrant) an increase in unemployment, it is much less common   
to explore the implications for incomes (which depends on   
the elasticity of demand).  
  
Cheers,  
Alan Isaac  
  
PS A visiting lecturer with a Univ of Chicago degree once   
described to me how his initial thesis work on the minimum   
wage showed no negative employment effect.  He said his   
advisor viewed this a proof enough (i.e., nothing in the   
empirical research was judged methodologically inadequate)   
that his initial work was flawed and sent him back to "fix"   
it.  This was some years before the Card and Kreuger study.