Reallocation effects of the minimum wage

Germany introduced a minimum wage in January 2015, setting it at a uniform national level of 8.50. The minimum wage cut deep into the wage distribution, with 15% of workers having earned an hourly wage below 8.50 six months before the minimum wage came into effect. The reform was triggered by falling wages at the bottom of the wage distribution (Dustmann et al. 2009, Marin 2010) and the dwindling importance of trade unions (Dustmann et al. 2014). In the period leading up to its introduction, the minimum wage was viewed critically by many economists and segments of the media (Sachverstndigenrat 2013, Der Spiegel 2013, FAZ 2013, Die Welt 2013), with two early studies predicting that it would cause up to 900,000 job losses (Knabe et al. 2014, Mller and Steiner 2013).

a). Explain how and why the introduction of a minimum wage might lead to the consequences discussed above ?

b). With the help of relevant economic models, explain in which situation the introduction of a minimum wage might have positive effects, if any ?