Raising the minimum wage to $10.10 per hour will benefit the US economy

In ROUND 2 my opponent makes several points--including accusing the U.S. Federal Reserve of forcing inflation to benefit the U.S. economy. She also accuses this federal organization of "crook[ing] the books" to make the numbers it reports look good to the American people. This second specific point is an allegation of wild conspiracy and I consider it irrelevant to the debate; however, she does use this argument to indicate that inflation is actually higher than what is reported, because of alterations to the way the Consumer Price Index (CPI) is computed since the early 1970s [1]. (My opponent is actually wrong. Excluding the prices of fuel and food from the CPI has been the way the U.S. Federal Reserve has been computing this parameter for decades now--not beginning in 2009, as she claims [2].)I want to point out that if inflation is actually higher than what the U.S. Federal Reserve is reporting, than this should motivate us even more to hike the minimum wage and index it to inflation! This means that the purchasing power of the federal minimum wage is even less than what the U.S. Labor Department is already reporting--and it's reporting a significant decrease in the value of the minimum wage over the last four decades in real terms with great worry [3]. (However, the inflation rate as reported is accurate; my opponent is in fact mistaken about the way the CPI is traditionally computed since the 1970s [2].)My opponent also claims that worker output should decide "pay scales in a real economy". I will demonstrate why she's correct, and why the 20% increase in worker productivity observed over this last decade should correspond with an increase in the federal minimum wage [4].I will demonstrate this and other reasons for hiking the federal minimum wage in this ROUND.Inflation has many causes, which is why the Federal Minimum Wage should be Indexed to InflationMy opponent argues that raising the federal minimum wage would be pointless, as inflation would eventually eat the gains caused by increasing the minimum wage. And on this point she is moderately right; however, inflation has many causes, as economists point out, and it's a healthy economic trend in any growing economy--as long as it stays within limits [5]. Inflation is caused when demand for a product or service outstrips supply, which causes prices to go up; it can also be caused when new popular technology is introduced--some brand names demand higher prices; but it can also be caused by the depletion of natural resources, by natural disasters, by an increase in production costs, by the deregulation of banks, by government regulation and taxation, by business monopolies, by the expansion of the money supply, and various other reasons [5]. Inflation is natural and unavoidable in any economy. But too much of it can present problems, which is why the federal government tries to regulate it wherever it can [5]. Increasing wages can also create inflation if a business passes on the wage increase to consumers, but this doesn't always happen [6]. Recently, inflation has caused even pay raises among middle class workers to be fruitless, as the modest pay increases simply aren't enough to deal with the deleterious effects of inflation, especially as the income gap grows between well-to-do employers, who are increasingly keeping more of their profits, and all other wage earners [7][4]. As I demonstrated in ROUND 2, the nation's wealthiest Americans are generating income comfortably exceeding the rate of inflation; the middle class has seen either stagnant wage growth or negative wage growth when accounting for the effect; the lower classes have seen the worse decline in income over this last decade [4]. Raising the federal minimum wage to $10.10 would eliminate the accumulated deleterious effects of inflation over the years for low wage earners; linking (or "indexing") it to inflation would ensure the effects are prevented in the future.Four states--Florida, Oregon, Washington, Vermont--have already indexed their state minimum wage to inflation, and Minnesota is currently proposing to do so [8]. After raising the state minimum wage and indexing, the state of Washington saw no negative impact on employment some initially feared would be there [9]. The Fair Minimum Wage Act of 2013, introduced in the U.S. House of Representatives, proposed raising the federal minimum wage to $10.10, and then having it adjusted every year to keep pace with the rising cost of living [10]. It is a congressional bill President Obama endorses and continues to endorse [11], particularly in light of the recent executive order he enacted which hiked the federal minimum wage for federal contractors from $7.25 to $10.10 [12].Since 2000, worker productivity is up 20%In ROUND 2, my opponent claims that worker productivity should decide their pay wages. I whole-heartedly agree! That's why I endorse raising the federal minimum wage to $10.10 per hour. Since 2000 worker productivity has risen 20%, even while median hourly wages among all workers have increased by only 3% [4]. Even more astounding is that since 2003, median hourly wages among all workers have not increased at all--zero increase in hourly wages--while the income of the nation's richest 5% have increased by 9% [4]! The nation's top 1% of earners have seen their incomes rise by 31.4% since 2009 [13]!This trend is frightening. While the nation's workers have seen their productivity rise, their income has not grown at all; yet the income of the nation's top 5% of earners continues to surge upward [4][5], widening the income gap. When the effects of inflation are incorporated, middle-class workers have seen their incomes stagnant while lower-class workers have seen the value of their wages depreciate, contributing to an uptick in poverty [4][14].Inadequate Increases in the Federal Minimum Wage have Increased PovertyIn the U.S. poverty is measured by whether a household fails to make enough income (or show enough savings) per year to surpass the "poverty threshold" assigned by the U.S government for the number of individuals living in the household [15][19]. Because of inadequate increases in the federal minimum wage with respect to inflation and because employee paychecks have become smaller in real terms for the same reason, poverty in the U.S. has increased over the last three decades [16]. The chart below illustrates the "povery guidelines" used by the Department of Health and Human Services for assigning poverty to a household based on annual income and number of people. Households making less than the income enumerated for the corresponding number of people in them are classified as "living in poverty". The "poverty guidelines" are in actuality simplified versions of the "poverty thresholds" used by the U.S. Census Bureau [19]. Now, from first appearances via this chart a full-time minimum wage earner might appear to not be in poverty, but if his/her family consist of another person not employed and not receiving any type of income (a child perhaps), that would assign this person as "living in poverty", simply because his/her income falls below the poverty guideline for the household number [17].In 2012 the U.S. Census Bureau announced that more than 16% of the U.S. population lived in poverty, including about 20% of all U.S. children, up from 13.2%--39.8 million people--in 2008 [15]. Since the 1980s, relative poverty in the U.S. has consistently exceeded that of other wealthy nations [15]. In 2011, child poverty reached historically high levels, with 16.7 million children living in food insecure households; in 2013 a UNICEF report ranked the U.S. as having the second highest relative child poverty rates in the developed world [15].The congressional budget office (CBO) projects that raising the minimum wage to $10.10 will not only add billions of dollars to the economy and provide additional income to low-wage earners, but that it will lift a full 900,000 people out of poverty [18]!American Tax-payers Subsidize Low-wage BusinessesFurthermore, American tax-payers subsidize low-wage businesses. Many low-wage earners have to rely on public assistance such as food stamps or the earned income tax credit (EITC), because their wages are simply too low. Programs like the EITC are useful protections against poverty, but we shouldn’t let them act as subsidies to low-wage employers, who currently pay lower wages because the American taxpayer will make up the difference [14].Raising the minimum wage would shrink the federal deficit, since fewer workers would qualify for the EITC [13]. Finally, a recent study by U.C.-Berkeley concluded that raising the minimum wage would allow 3 million people to quit the Supplemental Nutrition Assistance Program (SNAP) formerly known as food stamps [13].(Note: R2 = Round 2; S# = Source number)[1] (http://www.bankrate.com...)[2] (http://en.wikipedia.org...)[3] S8, R2[4] S3, R2[5] (http://useconomy.about.com...)[6] (http://www.wisegeek.com...)[7] (http://www.washingtonpost.com...)[8] (http://www.ehow.com...)[9] (http://seattletimes.com...)[10] (http://www.raisetheminimumwage.com...)[11] (http://www.nytimes.com...;)[12] S11, R2[13] S5, R2[14] S4, R2[15] (http://en.wikipedia.org...)[16] (http://www.worldhunger.org...)[17] (http://poverty.ucdavis.edu...)[18] S1, R2[19] S2, R2