Introductory economics textbooks usually first introduce the minimum wage as an application of demand and supply analysis. This initial discussion is usually based on the following assumptions:
-the labor market is perfectly competitive,
-the minimum wage covers all workers, and
-worker productivity is unaffected by the wage rate.
Under these assumptions, the effect of the minimum wage is quite straightforward: the introduction of a minimum wage results in unemployment in those labor markets in which the equilibrium wage rate is below the minimum wage. This is illustrated in the diagram below:
While minimum wage increases generally receive substantial public support, economists have generally relied on the above analysis to argue that such legislation will result in an increase in the unemployment rate in low-wage labor markets.
http://www.swcollege.com/bef/policy_debates/increase_minimum.html
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