My mother hire two maids. In Jakarta, it's normal to pay 700 to 800 thousand rupiahs to a maid each month. Say it's 800,000. Now imagine that the government require households to comply with the minimum wage law. For Jakarta, it's Rp 1 million. What would my mother do? Well, she might give up one maid, and hire only one. Or, if she ever thought to hire a third one, she would cancell that. In the first case, my mother would send one person to unemployment. In the second case, my mother could have created one employment, but thanks to the minimum wage law, she called it a no.What's the moral here? Minimum wage law is good only for those already in the job and who are lucky not to get kicked out by the saving employer. Minimum wage law is bad for unemployment.
You might ask: but minimum wage law is not required for households. What difference is there between companies and my mother?