"My vision of the real world is that it is rife with monopoly, monopsony, and all sorts of price and wage discrimination. But, this is in the context of lots of compeition. Competition is "imperfect," but the gains and losses in efficiency are small and fleeting in world of creative distruction.Our estimates are pooled across labor markets and firms. A zero effect really just means we've got about as many going one way as the other.
Still, I wouldn't be surprised if the monopsony effect resulted in some firms hiring more workers due to a higher minimum wage. Unfortunately, that same increase in the minimum wage will push the wage above the marginal revenue product of labor for other firms so that they hire fewer workers.
The notion that government operates like an omniscient benevolent despot and could and would set a wage in each and every market so that competitive equilibrium is approximated is completely unrealistic. I think a more plausible starting place would be politicians trading off the loss of employment versus the increase in wage income. That would suggest that minimum wages would be set above the marginal revenue product of the current level of employment. Of course, reduced profits to firms, very significant politically relevant short run, and even higher prices to those purchasing the products might relevant."
The wage discrimination point in the post is important to consider too, although its relative prevalence is obviously an empirical question (I'm guessing these places for the minimum wage discussion have take-it-or-leave it wage structures).