This assumes that workers are of a fixed quality. I know I worked harder for $10/hour than I did for $7.25. Higher pay means stronger incentives to do well and less stress from poverty.

However:

Employers will have to hire fewer workers because their workers are more productive

More people will be interested in the jobs, increasing employee competition

Since people vary, some people's increase in productivity will be insufficient to cover the increase of wages

The end result it seems is that getting a job is made harder. This is not to say that increased wages are bad, they are great.

"increase in productivity will be insufficient to cover the increase of wages" is only true if the company isn't turning a profit or paying high salary to managers. This is relevant for some small businesses and bankruptcy-threatened large business, but not for the largest players in the economy, like Walmart.

2) Whether the company is turning or a profit or paying a high salary is completely irreleavent. The question is whether or not you are productive enough that hiring you makes the company more money then they pay you.

Efficiency wage theory definitely doesn't assume that. In fact, a big part of the theory revolves around your existing workers becoming more productive.

Even if you assume your applicant pool stays the same, you would see less turnover with efficient wages—and hence fewer job openings.

In higher populated areas, yes.

In lower populated rural/areas, not necessarily. In fact, by raising wages in rural areas, additional money coming in from income taxes could be funneled into infrastructure, poorly-funded schools, and law enforcement. This would in theory help produce new areas of innovation and growth which in turn help provide more tax revenue for the state and country. It could also bring more people out of poverty, reduce crime and violence, and help to shutdown meth labs which are more common in rural areas.

I think there are some good arguments against raising wages of workers, like much higher wage workers already making enough to be so comfortable as to not require more (depending on how they pay their employees if they are a small business), or to things such as some cases showing that raising minimum wage causes inflation which causes the quality of life of everyone over the minimum wage to go down, such as: http://www.latimes.com/opinion/op-ed/la-oe-0419-goldberg-min...

However, for most of those reading HN, salary raises have more to do with being competitive, in which case paying more for a better applicant is a good thing.

When a large employer raises its wage a big chunk of people who work a few hours at a second job stop working that second job.

With the U.S. underemployment rate at 12.9%, having additional jobs available for people to take shouldn't be a bad thing:

https://www.statista.com/statistics/205240/us-underemploymen...

Citation wanted. It really doesn't make sense. Sure, a different class of applicants may fill those higher paying positions, but either those people weren't employed to begin with, which contradicts your point, or they had to leave other jobs to apply for this one, creating open positions where they left, which results in overall employment staying the same.

In scenario 1, Person A works for Wal-Mart and Person B works elsewhere.

In scenario 2, Person A has no job, and Person B works at Walmart, and Person's B previous position is unfilled.

I will also grant that as wages rise, certain jobs simply cease to exist, because it becomes uneconomical to pay anyone to do them. Being from Denmark where wages are very high, I was astounded to be greeted by not fewer than ten clerks in a small, mostly empty Swatch store I visited in Beijing. To have that much staff to do mostly nothing can only happen where wages are extremely low. If wages were to rise, one by one those clerks would probably be laid off. But not because a more skilled person would claim their position, but simply because it would become too expensive to pay any person to do that job given the value it creates.

However, there are some additional factors that complicate this picture. If there are fewer unskilled jobs, people will adjust by working to become more skilled. If people have higher paying jobs they will spend more, producing more jobs. If there are many unskilled people looking for work, there is incentive for somebody to find a way to make use of that resource.

But really, the only point I sought to make here was that your original comment which didn't look at the non-skilled worker was missing a bit part of the equation, and so its logic didn't work.