Raising the U.S. minimum wage to $10/hour is a bad idea

Ultimately a minimum wage is necessary to ensure the poor are paid more than slave wages. Even Adam Smith in writing "The Wealth of Nations" recognized its necessity.[1] Smith however also recognized that with higher wages comes inflation, or increase in the price of goods, writing, "The increase in the wages of labour necessarily increases the price of many commodities, by increasing that part of it which resolves into wages, and so far tends to diminish their consumption both at home and abroad.[2]At any rate, my argument is not against "a" minimum wage, but too high a minimum wage. You see, while a minimum wage is necessary, by itself it does not actually fix the root problems of why the poor are poor; raising it will not give them a higher percentage of the overall wealth, as will be shown, and indeed will cost many of them their jobs. The minimum wage was originated in 1938 at 25 cents an hour and was raised to 30 cents an hour the next year. While that may not sound like much today, back in 1940 you could buy a loaf of bread for 8 cents, a gallon of gas for 18 cents, and a new car for $1,611.[3] The minimum wage has since been increased as follows:[4] 1939: $0.30 1945: $0.40 1950: $0.75 1956: $1.00 1961: $1.15 1968: $1.60 1977: $2.30 1981: $3.35 1991: $4.25 1997: $5.15 2007: $7.25 Now, if raising the minimum wage were the panacea for the impoverished that progressives purport, then the poor should be better off after all of those minimum wage hikes, correct? The facts show otherwise. From 1983 to 2009 the poorest 60% of Americans lost wealth while the richest 10% of Americans got 91.9% of all wealth gain.[5] Even though the minimum wage was more than doubled from $3.35 to $7.25, a 116% increase, the rich stole wealth from the poor.[6] This debunks the idea that raising the minimum wage will necessarily help the poor.The movement to raise the minimum wage ignores the reason people are poor, which is not enough employment. However, a CBO report found that raising the minimum wage would reduce employment by 500,000. As noted by Jeffrey Dorfman of Forbes on the subject:"The reality is that families in poverty very rarely have a full-time worker in the family; in fact, only 7 percent of the time. The entire bottom 20 percent of income earners (which includes some people above the poverty line) averages only 0.42 earners per household. People are not in poverty because the minimum wage is too low, or because their hourly pay is too low even when they make above the minimum wage. People are in poverty because they are not working or not working enough. They need jobs, not an increase in the minimum wage."[7]A minimum wage increase is a job-killer, and this is evident from examining state employment rates. The following are the 20 states ranked by highest minimum wage, along with their unemployment ranks.[8] 1-Washington: $9.32, rank 24 2-Oregon: $9.10, rank 43 3-California: $9.00, rank 47 4-Vermont: $8.73, rank 10 5-Connecticut: $8.70, rank 34 6-Illinois: $8.25, rank 38 6-New Jersey: $8.25, rank 38 6-Nevada: $8.25, rank 44 9-Rhode Island: $8.00, rank 48 9-New York: $8.00, rank 24 9-Massachusetts: $8.00, rank 24 9-Colorado: $8.00, rank 9 9-Minnesota: $8.00, rank 5 14-Ohio: $7.95, rank 17 15-Florida: $7.93, rank 24 16-Montana: $7.90, rank 12 16-Arizona: $7.90, rank 41 18-Alaska: $7.75, rank 41 18-Delaware: $7.75, rank 34 20-Maine: $7.50, rank 22 20-New Mexico: $7.50, rank 36 20-Missouri: $7.50, rank 23 With few exceptions, states with high minimum wages tend to have very poor unemployment rates. And the highest ranked one here, Minnesota, just changed its minimum wage from $6.15 to $8.00 a few months ago, and hasn't yet had time for an unemployment increase to occur. Job losses are the logical outcome of a minimum wage increase for the following reasons: Businesses, particularly small businesses, have limited assets to hire workers with. Say a small business has $100/hour to hire roughly 14 workers with, but the minimum wage increases to $10.00/hour. Now they can only hire 10 workers instead of 14. This is an overly simplistic example that does not take into account benefits, but you get the idea. Region competitiveness is decreased. According to analysis by the Economic Policy Institute, from 2001-10 the U.S. lost 2.8 million jobs to China[9] and 682,900 to Mexico.[10] The U.S. had a $318 billion trade deficit with China in 2013, and a $315 billion trade deficit in 2012.[11] Ultimately Chinese manufacturing workers are paid just 5% what their U.S. counterparts get paid.[12] Raising the minimum wage results in more outsourcing of U.S. jobs to low minimum wage countries. Even apart from outsourcing, companies, including CEOs, will react to the minimum wage hikes with automation (replacing workers with machines), hiring illegal immigrants, or converting full-time jobs to part-time in order to avoid paying benefits and overtime. Illinois' recent call for a minimum wage hike for example led to McDonalds replacing cashiers with machines.[13] If a minimum wage hike would truly help workers then I would be all for it, but it does not reduce poverty.Sources[1] http://books.google.com...;(pp. 147-48, 68-69)[2] Ibid, p. 89 [3] http://www.census.gov...;[4] http://www.dol.gov...;[5] http://www.epi.org...[6] http://economix.blogs.nytimes.com...;[7] http://www.forbes.com...;[8] http://www.dol.gov...;http://www.bls.gov...;[9] http://www.epi.org...[10] http://www.epi.org...[11] https://www.census.gov...; [12] http://www.bls.gov...;[13] http://online.wsj.com...;