I recently spoke with a small-business owner who sometimes hires low-skilled, part-time help for some fairly simple jobs. The jobs don’t pay very much, but they give the owner a chance to size up potential full-time workers, provide job skills for some inexperienced workers and give those workers a reference they can use in future job searches.

With the increase in July of the federal minimum wage to $6.55 per hour from $5.85, hiring this type of worker just got more expensive. It will cost even more next July, when the minimum wage reaches $7.25 per hour — an overall increase of 24 percent.

Businesses must earn more than they spend, so any significant increase in costs is important. Because of the higher minimum wage, the local business owner I spoke with said he will at least consider hiring fewer part-time workers next season, and is even considering replacing these employees with capital equipment designed to do the work they had been doing.

Although they may be well-intended, minimum wage laws price some potential workers out of the job market, especially young, inexperienced workers. If the minimum wage is set below the lowest free-market wage, it does no harm and no one is forced into joblessness; however, when the minimum wage is set above the market wage, it will cause more unemployment than otherwise would be the case.

Businesses employ workers to help generate revenue, and they stop hiring when the next potential worker would cost more than any additional revenue generated. When a firm is forced to comply with a legal minimum wage, the cost of an additional worker becomes higher and, therefore, the cut-off point for hiring the additional worker becomes lower. In other words, the minimum wage lowers the chance that a relatively low-productivity worker will be worth as much as he costs.

Economist Walter Williams has noted the harmful effects of minimum wage laws on young people, especially young black people. Because of their age and lack of experience, young workers tend to be some of the least valuable to employers, leaving them more adversely affected by the minimum wage than older workers, Williams writes. Young black workers are even more affected, he notes.

According to the Bureau of Labor Statistics, the unemployment rate for black teens ages 16-19 was 30 percent last year compared with 14 percent for white kids of the same age. The labor force participation rate for black teens also was well below that of white teens, the BLS reported. This was not always so, Williams notes. Around 50 years ago, the unemployment rate for black and white people of all ages was about the same while unemployment for black teens ages 16-18 was below that of white teens, he writes.

What’s more, “the minimum wage law encourages racial discrimination,” Williams writes. “It does so because if an employer must pay the same [wage] no matter whom he hires, he has greater incentive to indulge his preferences for worker physical characteristics such as race or sex.”

White labor unions in South Africa were some of the strongest supporters of minimum pay laws because, as Williams notes, “equal pay-for-equal-work laws would lower the cost of racial discrimination … and thus improve competitive advantage of white workers. In other words, if [employers] had to pay blacks the same wages as they paid whites, the cost of discrimination against black workers [who were often willing to work for less than whites] would be zero.”

Low-paying, entry-level jobs provide important experience for young people. These jobs provide skills, habits and a track record that will make young workers more attractive to future employers. Minimum wage laws simply reduce the number of such jobs.

Another economist, Thomas Sowell, has noted that you cannot make people better off by taking options away from them. Outlawing mutually agreeable employment arrangements at whatever wage clearly removes options for employers and employees and forces both to settle for something they prefer less.

Minimum wage laws may seem like an easy way to reduce poverty. But real wages only increase if productivity increases. What’s more, workers are better able to secure higher real wages if there are many potential employers competing for their services. Mandating higher employment costs discourages rather than encourages a more competitive job market.

The minimum wage may be a vote winner and may make lawmakers feel they are doing good in the world; however, it deprives the economy of a number of potentially productive workers, adds to unemployment and harms the least-experienced and least-productive workers. Minimum wage laws also reduce economic freedom and freedom of individuals to enter into voluntary agreements on their own. For all these reasons, the minimum wage should go.