On another forum, there was an argument about raising minimum wage. Some people were saying it is a good idea because it puts more money in the pockets of the lowest income people (this is true). Some said it was potentially bad because it would force layoffs since it would dramatically increase the labour cost to run a business (this is also true). A small group of people argued something that really struck me as interesting. They claimed that raising minimum wage would increase the amount of money the lower class has, which would increase their demand on goods, which would cause inflation, which leaves those lower class people in the exact same position of poverty they started in. If you think about it, this absolutely makes sense. If people have more money, it lowers the value of that money, which means you need more money, and the cycle goes on. For example, a Mexican may earn $1 per hour in Mexico, but he can buy food for $1. An American will earn $5 per hour, but his food costs $5. The American earns 5x as much as the Mexican, but he is not any wealthier. This being said, how do we fight poverty? If we throw money at poor people, it will cause inflation. Not only does that not help poor people, but it hurts middle and upper class people because their savings are worth less and less with each passing day, unless they have it invested properly.