Obama presented it as a way to help struggling families: "Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty." That comment provides a misleading picture of who minimum-wage earners are. The White House's own graph promoting the idea shows that only 26 percent of minimum-wage earners have kids. Thirty percent either have spouses and no kids or are kids themselves.

Raising the minimum wage is not an effective tool against poverty, either. A 2010 study found that state poverty rates were unaffected by minimum-wage increases. It also found that if the minimum wage were raised to $9.50 an hour from $7.25, only 11 percent of the beneficiaries would be people who live in poor households. Forty-two percent would be people living in households making more than three times the poverty line (which means they're well above the country's median household income).

So the benefits of raising the minimum wage are not as large as you might expect. On to the costs. For a long time, economists generally agreed that raising the minimum wage reduced employment. The logic is straightforward enough: Raise the price of something, and people will buy less of it — even when that "something" is labor, and the people in question are employers.