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I believe that dangus is referring to the very high marginal "tax rate" low wage workers face, as their wages increase -- or turning that around, the very high rate of increase of subsidy, as wages go down. The following chart shows what I mean:

IOW, when the minimum wage goes up, most of it is "taxed" away (mainly by reduced subsidies). dangus has an interesting take on things -- but, essentially, he's right.

More here:

http://www.heritage.org/research/reports/2013/01/effective-marginal-tax-rates-for-low-income-workers-are-high

>> So, by your logic, the higher the better? Should the minimum wage be $50 an hour? $100 an hour? <<

I said nothing of the sort, nor anything from which any reasonable person could infer anything of the sort. But I’ll explain myself anyway:

If we did away with the welfare state and government-subsidized illegal immigration, and instead enforced immigration law, I would be all for the market set the wage. My problem is that by having taxpayers pay living costs for low-income workers, we’re subsidizing business to pay wages far below what anyone could otherwise afford to accept. So what should the minimum wage be? Well, it should be enough that taxpayers wouldn’t have to subsidize the cost of living.

I do NOT think there should necessarily be a single minimum wage; it could increase with length of service with a company and required education: A burger flipper at McDonald’s is so terribly low-skilled that any English speaker should be able to move up from it to something else. Anyone who speaks English (NO ILLEGAL IMMIGRATION!!!) should be able to do something far more skilled by the time he is 28, the median age for someone to first be both married and having kids. If he’s been working at McDonald’s since he’s 17, I’d hope he’d be at least an evening manager within 11 years. Of course, locally, most McDonald’s are staffed by non-English-speaking immigrants who are typically far older.