South By North Strategies, Ltd.

A Center for American Progress review of the most recent research into the employment effects associated with raising the minimum notes that increases don’t increase unemployment, even during recessions.

In short, the academic research suggests that even during hard economic times, raising the minimum wage doesn’t reduce employment.
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Why is this the case? Studies generally find that policies that increase the compensation of low-wage workers significantly reduce turnover, boost worker effort,encourage employers to invest in training for their workers, and can increase demand for goods and services—all of which help balance out any potential negative effects.
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There may be another factor that comes into play even more during hard times—economic power. Low-wage workers have very little of it, particularly during periods of high unemployment.
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When the economy is doing poorly , employers have less incentive e to raise wages, while workers, especially those making near minimum wage, have little ability to demand a raise because there is a ready supply of unemployed labor available to take their job. Even though these workers likely become more productive … they have less economic power to ask to be paid for their increased productivity. This suggests that during hard economic times, there is a critical role for government to raise the minimum wage to ensure workers are being paid for their economic contributions.