On the bright side, however, the only way the minimum wage hike is bad is if people are going to take the extra money and bury it somewhere. Otherwise, it will be spending capital that circulates back into the economy.
Except that the minimum wage doesn’t create any new capital. If companies are forced to pay more salary they will compensate elsewhere, like layoffs or price increases.
Anything that would return less than $5.15 an hour to an employer is not now being employed anywhere in this country because of the minimum wage. The opportunity cost to the economy can’t be calculated.
Where does that "extra money" come from? Employers will have two options - (A) raise rates or (B) hire fewer workers. Option (A) means you pay more for goods and services. Option (B) means that there are fewer opportunities for low-skill workers to learn critical job skills.
There's also option (C) - hire under the table.