The Minimum-wage debate

This article from MSNBC (msnbc.msn.com/id/11060191)says that the gap between the rich and the poor has increased in the US. The minimum wage is one of the various reasons that the rich-poor disparity has increased. The current minimum wage ($5.15 per hour) is much lower than what it was during the 50's and 60s’(purchasing power was highest in 1968, where it was 8.8 2005 dollars per hour). Just for comparison the Australia’s minimum-wage is almost 9 USD per hour.
There has been a lot of debate about whether the minimum wage should be increased or not. It is established that in a monopsonist firm workers will be better off. But, the economist are split over whether an increase in minimum-wage has negative effects (such as increase in unemployment, slow economic growth due to higher labor cost) or positive effects (such as economic growth due to rise in purchasing power, better standard of living) in general and in monopolists or perfectly competitive firms.
In a survey in the 2005 issue of the Journal of Economic Perspectives two-thirds of academic economists at top universities agreed with the statement, "a minimum wage increases unemployment among young and unskilled." While a lot of people base their opinion on an empirical research by David Card and Alan Krueger, which said that the increase in minimum wage has minimal effect on the market.
Bill Clinton had passed the law allowing states to set the minimum wage higher than that of the federal. As of now, 18 states have their wage set above the federal’s. Even some counties and cities have increased the minimum wage higher than that of its state. The highest minimum wage level is in Santa Fe with 9.5 per hour, even though the minimum wage in New Mexico is only $5.15 per hour.
The research is still going on whether it is good or bad for economy. With New Jersey planning to increase the minimum wage to $7.15 in October 2006, it will be interesting to see what will follow.
I think that in long/medium run, the minimum wage increment will benefit people, since the unemployment rate will eventually be equal to the natural rate. The rise in the unemployment rate may be inevitable right after the wage is increased but eventually it will smooth out. Also, I think the rise in the wage will stimulate economy since the purchasing power of the labor will increase. Besides, the firm will be focus more on being a capital intensive rather than a labor intensive firm i.e. more money will be spent in capital and training.