creating a new job while paying less can be good sure, but the problem is thats not what will happen, companies will have a race to the bottom paying as little as possible. and as people have said paying someone more may help them be a more productive happy member of staff. rather than paying them a pittance and then expecting the state to top up there wage making them feel even more down at having to live on hand outs rather than their own two feet.
as i have said, the min wage isnt even enough to live on without working tax credits now, imagine if you dropped min wage by half how much extra would the gov pick up. if any for that matter with some of the ramblings coming out of the dwp of late they want to cut working tax credits.
again this is only my view from working for such wages and searching for work while we had no min wage.
It might not happen, agreed, but it is also something that might. Which side to err on, is not a topic that is likely to be decided here.
Companies may well be willing to pay more to have someone more productive. Alternatively, jobs might be created by hiring low paid staff for jobs which otherwise wouldn't be done. Just as an example - greeters in a big store. Now it's not particularly necessary and most stores wouldn't have one. However, would it be worth it to them to create a role and pay someone a bit just to improve the customer experience?
The govt. would have to pick up extra to make up for the ones who are on min. wage and for whom it is reduced. However, what about the people who start working and then need half instead of 100% from them? It won't definitely balance out, but it could do. More people working, even at lesser rates, could be a positive.
I am thinking it out logically here though without the past experience that you have had. It might work out exactly as you said instead, but I do think it is something worth considering objectively at least.
I was raised in India and there is no minimum wage. There is a lot of abject poverty, but I also see a huge number of jobs which are being carried out which really aren't necessary. Hotels have staff for the elevators who do nothing but press the button. They have multiple people outside to do nothing but greet guests and open/close car doors (+ they all get tipped).
Would these jobs exist if there was a minimum wage? I doubt it. I also see that if the person has a certain level of skill, even in a relatively unskilled jobs (as an example, servant in India), they are able to, and get paid, more. People/companies are often willing to pay extra to get someone who is actually good and this may well result in the jobs that are worth the current minimum, to stay at that minimum.