Yesterday, Jessie Jackson penned an article in the Sun Times (oddly enough under the 'News' link in the banner) where he bestows the virtue of his son's heroic effort in congress to raise the minimum wage to $10/hour (emphasis mine):
Last week, legislators led by my son Rep. Jesse Jackson Jr. (I write with some pride) called on the Congress to raise the minimum wage to $10 an hour, back to the levels it reached in 1968, and index it to inflation so it doesn't lose value over time. Republicans in Congress will block a vote on this measure. Democratic leaders can't figure out where they are on it. The U.S. Chamber of Commerce will unleash a horde of lobbyists to oppose it. But the reality is that this would be a no-brainer. And it is time for the president and sensible leaders in both parties to push for its passage.
Raising the minimum wage to $10 an hour would lift the wages of 30 million Americans, more than 20 percent of the work force. It would not only affect the wages of those who work for less than $10 an hour but also of those who make a little more, as employers would raise their pay to retain good workers. A staggering 40 percent of the work force falls within that range.
Hell, why stop at $10? Why not $20 or $30 or even $100? After all, at $100/per hour just think of how much better those 30 million Americans would live! The answer is of course that as we all know by now raising minimum wage standard causes layoffs. Labor wages are not arbitrary, as Rev. Jackson would have you believe. Labor is a cost to a business and most businesses in this country are small businesses who have tight bottom lines. If congress arbitrarily raises the cost of small businesses, something will have to give.
Usually that 'something' is reduction in staff, higher prices to consumers, or cutting costs in other areas like marketing. In each case, it will cause the small business to become less competitive in the market and thereby putting its very existence in jeopardy. And if the business ceases to exist there are no jobs regardless of what congress says the minimum wage should be.
In the chart above it is clear that raising the minimum wage has exactly the wrong result. So rather than lifting wages for 30 million Americans, a higher minimum wage will simply increase wages for some while the rest are out of work and put yet added strain on small businesses who are struggling right now.
As much as politicians and other advocates of the minimum wage might pretend otherwise, the laws of supply and demand (like the law of gravity) are NOT optional.