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Supply and demand sounds simple.听It rarely is, however, and some cases are quite complex.听Consider the minimum wage.

Raising the minimum wage makes low-skilled labor more expensive.听Basic supply and demand suggests that businesses are likely to adjust by employing fewer low-skilled workers or reducing their hours.

Economists call that straightforward adjustment the 鈥渆mployment effect鈥� of the minimum wage.听Estimates of the actual employment effect 鈥� and there are file drawers full of them 鈥� are not so straightforward, however.听Most are indeed negative, meaning that an increase in the minimum wage reduces the employment of low-skilled workers.

But many of the negative estimates are small, some estimates are close to zero and some are even positive, suggesting that raising the minimum wage might actually increase the employment of low-skilled workers.

The conflicting estimates have economists themselves conflicted.听To many, the large percentage of negative estimates supports the traditional view that the minimum wage costs many low-skilled workers either their jobs or work hours.听To other economists, the variability in the estimates means we still can鈥檛 say with confidence what the actual employment effect is.听

To still others, the preponderance of small negatives, close to zeroes, and positives among the estimates indicates that raising the minimum wage has little if any harmful effect on the employment of low-skilled workers.听These economists tend to favor raising the minimum wage.

There鈥檚 another interpretation.

Professional grade supply and demand is ever mindful that people can be quite creative in adjusting to change.听For instance, businesses can adjust to an increase in the minimum wage in all sorts of ways.

One is to raise prices.听Economists have investigated this option closely and have found that businesses largely reject it.听For most businesses, wages paid to low-skilled workers is a small fraction of their costs.听A higher minimum wage thus increases costs only marginally.听Raising prices to cover the costs of a higher minimum wage risks alienating customers.

Plus, there are easier options.听Cut health benefits to low-skilled workers.听Cut their breaks.听Cut their food or merchandise discounts.听Cut their training or work amenities.听In short, offset the higher wage by cutting other forms of compensation.

It鈥檚 thus possible for a minimum wage increase to have no effect on the total compensation or employment of low-skilled workers.听What workers gain in a higher wage they lose in other compensation, which enables businesses to avoid cutting hours or jobs.

Another option: raise performance standards and be quick to dismiss workers who fail to meet the higher standards.

Workers adjust in creative ways, too.听听 听听听听听听听听听听听听

Pay workers more and they are less likely to quit.听They are also less likely to behave in ways that might get them fired.听Happier workers are also more productive.

That鈥檚 not 鈥渇eel good鈥� fluff.听Ample evidence supports the claims.听Treating people with common decency is good business.

Which means raising the minimum wage might pay for itself, or better.听If the lower turnover and greater productivity reduce costs by more than the higher minimum wage raises costs, the happy possibility becomes reality.

Skeptical?听I am.听Most business owners and managers already understand all that about turnover, productivity and treating workers decently, don鈥檛 they?

At any rate, the upshot is that the employment effect of the minimum wage is likely to vary considerably across businesses, industries, towns, cities and workers.听That鈥檚 why the estimates of the employment effect vary so much.听There is no single employment effect; there are many of them.

So, should we raise the minimum wage or not?听We鈥檒l take that up in my next column.