[derekp7]

To carry that example further, you have many people that are willing to pay $3 per widget. But there are barriers to opening a widget factory, such that there is only one widget factory in town. And the owner of that factory only wants to pay worker 50 cents per hour, selling the widgets produced for $3.00. Now total money paid to workers is much lower than if minimum wage is set to $3.00

So the moral of the story is minimum wage should be raised to the point where total employment is still at an acceptable level.