You're 100% correct. It also can have the effect of pricing a job out the market.
I wish that republicans could get this point across but unfortunately it is probably too complex for the masses.
The masses would rather have a dose of a feelgood measure.
I basically did an econ 101 class on this very issue on our local website, and finally got through I thought, taking these folks step by step through what a business goes through, like it wont, be just 5 dollars and whatever change they are raising it too there will be another 7.5 % on top of that for the matching funds businesses has to pay and so on. Then someone on the boards said, well prices go up anyway so we might as well have a little more money so let's vote for it.
It was then that the headaches and the eye twitches started so I went and screamed at the passersby on the sidewalk for a bit.
I think I am allergic to stupid people.