The Instigator
db0
Pro (for)
Losing
7 Points
The Contender
Ragnar_Rahl
Con (against)
Winning
14 Points

Abolishing the minimum wage will not reduce unemployment

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
Ragnar_Rahl
Voting Style: Open Point System: 7 Point
Started: 7/18/2009 Category: Society
Updated: 5 years ago Status: Post Voting Period
Viewed: 11,675 times Debate No: 8973
Debate Rounds (4)
Comments (21)
Votes (3)

 

db0

Pro

In the debate I noticed on Minimum wage (http://www.debate.org...), I was disappointed from the Arguments put forth from the Pro side which ended up agreeing effectively that minimum wage reduces employment and just tried to put forth a defence of a subsistence based minimum-wage. I feel that the defense of minimum wage has a lot more meat than what was presented and thus I would like to put the Pro side for minimum wage myself.
---
Removing the minimum wage in an economy is akin to cutting wages all across the economy as Capitalist firms will scramble over each other in their rush to reduce costs. This will take the form of forcing employee wages to their cost (ie their subsistence) while simultaneously increasing the work hours that are allowed per day.

However to assume that reducing wages to their cost will reduce unemployment is to assume that the labour market can clear, like any other commodity. That is, the market will reach an equilibrium where supply of labour equals demand.

However this is not the case. The labour market cannot not clear. Reducing wages in the economy means that people will not be able to afford the lifestyle the had until that point. This means that people may decide to start getting a second job, or work more hours, or more family members will start working, from a younger or older age as well. This will increase supply rather than fulfil the current demand. You will get the same or rising unemployment while wages stagnate or drop.
Looking empirically at this issue confirms it, as can be seen during the Great Depression where by 1933 wages and salaries in manufacturing were at less than half their 1929 level while unemployment was rising http://books.google.com.... Of course, the actually real wages of the workforce were rising, due to the faster falling prices of commodities, which incidentally leads me to the second point.

Workers cannot control their own price as they do not control the prices in the economy. Even if workers were to have no minimum wage and start taking pay cuts, this would not mean that profits would increase. This is because if worker wages drop while commodity prices remain the same, so does their real wage and thus their purchasing power. This means less spending and thus less profits for companies. This would mean a cut in production and further laying off of workers and *loss* of positions. Unemployment would rise.

In truth, minimum wages do not cause unemployment in the least. This is something supported by large number of empirical evidence such as the Reagan period where minimum wage declined while unemployment became chronic. Minimum wage, and high wages of the workers generally do not affect unemployment levels but are rather shaped by the state of the economy around them.

I will await a challenger before I continue with presenting more arguments.
Ragnar_Rahl

Con

"
Removing the minimum wage in an economy is akin to cutting wages all across the economy as Capitalist firms will scramble over each other in their rush to reduce costs."

Labor is neither homogenous nor passive. If it were, as your argument requires, there would be no such thing as a job above the minimum wage. Obviously, such jobs exist, thus, forces other than the minimum wage prevent cuts "all across the economy."

"
However to assume that reducing wages to their cost will reduce unemployment is to assume that the labour market can clear, like any other commodity. That is, the market will reach an equilibrium where supply of labour equals demand.

However this is not the case. The labour market cannot not clear. Reducing wages in the economy means that people will not be able to afford the lifestyle the had until that point"
No such reduction is relevant. The primary effect of eliminating the minimum wage is employing workers who would otherwise be completely unemployable, as their production level is lower than the cost of employing them under a minimum wage. Economics is not zero sum, this need not subtract from anyone else, it merely creates opportunities not there before. Those capable of producing more than the minimum wage will get more than it, except perhaps those at the very bleeding edge of where the specialization values bring them over the bleeding edge, in which case negotiation will bring them slightly less (A significantly smaller number than the number unemployable due to minimum wage).

"This means that people may decide to start getting a second job, or work more hours, or more family members will start working, from a younger or older age as well."
Which means, in any meaningful terms terms, unemployment lowers, because employment rises, people are more employed, if this were true (Which it partially is in the sense that without a minimum wage, teenagers have a much easier time getting a part time job to gain experience and money for minor luxuries). Traditional economic definitions of "unemployment" essentially serve to disguise the nature of what constitutes more employment (An economy in which everyone worked 1 hour of their optimal task would count as more employed than one in which 90 percent work 40 hours of their optimal task by such tradition, and thus such definition should be discarded in favor of one that better recognizes the conceptual root of the phenomenon "employment." Whittling away at unemployment numbers by making fewer people employable and spreading around the employment is fallacious, as it does not address that conceptual root, the basis for which we speak of "employment."

"
Looking empirically at this issue confirms it, as can be seen during the Great Depression where by 1933 wages and salaries in manufacturing were at less than half their 1929 level while unemployment was rising http://books.google.com....... Of course, the actually real wages of the workforce were rising, due to the faster falling prices of commodities, which incidentally leads me to the second point."
You'll note that such wage drop had nothing to do with a lowering in the minimum wage, and in any case you are committing the fallacy of correlation equating to causation.

"Of course, the actually real wages of the workforce were rising, due to the faster falling prices of commoditie"
Real wages are the only ones that matter. You've contradicted your argument, since now you argue that rising real labor costs is correlated with higher unemployment.

"
Workers cannot control their own price"
Workers control one half of a bargain, the employer controls the other half. The fact that no one holds total control does not prevent them from influencing matters.

"Even if workers were to have no minimum wage and start taking pay cuts, this would not mean that profits would increase. This is because if worker wages drop while commodity prices remain the same, so does their real wage and thus their purchasing power. This means less spending and thus less profits for companies. This would mean a cut in production and further laying off of workers and *loss* of positions. Unemployment would rise."

The demands of common laborers are not the primary engine of the economy. Common laborers have always wanted more, always been willing to trade for it-- it's only if there is incentive for those with ideas about how to more efficiently utilize that laborer to make more needs fulfillable that the economy grows. Declaring open season on all workers willing, instead of automatically disqualifying the lowest tier, can't help much when the minimum wage is already low, but it can only help. In order for an employer to get the new things he wants, he has to toss enough purchasing power the worker's way to convince them to come from wherever they are. He has to offer more, in other words. He can't offer less, overall. Since the effective supply of "labor" employed is increasing not primarily as a result of new people being added to the world but as a result of new people being added to the category people bother tracking as validly "seeking employment" (e.g., folks such as teenagers, who wouldn't be bothered to be counted in the employment statistics before), it does not matter, as you seem to imply, that the official statistics will go up-- fewer people will be unemployed than before.

"
In truth, minimum wages do not cause unemployment in the least. This is something supported by large number of empirical evidence such as the Reagan period where minimum wage declined while unemployment became chronic."
Fallacious. Economics depends on the "other things equal" assumption. Statistics never have other things equal unless there is a controlled experiment, which is by definition impossible in economics. Only abstract thought can effectively reproduce the other-things-equal assumption.

If more people are added to the category of those who I can employ at a profit rather than a loss, other things equal, I will employ more of them.
Debate Round No. 1
db0

Pro

My opponent claims that if it was true that abolishing minimum wage would reduce wages overall, then this would have happened already, and he brings the example of the jobs that get more than the minimum wage. But this does not counter my argument. While increased scarcity in some positions will keep them sufficiently high, most other jobs will be affected by the large and increasing supply of workers which will drive their cost lower and lower. The jobs that are currently on the minimum wage due to law preventing them from going lower will drop while the rest will be affected similarly.

"The primary effect of eliminating the minimum wage is employing workers who would otherwise be completely unemployable, as their production level is lower than the cost of employing them under a minimum wage."

You cannot judge the production of a worker before employing them, but this is exactly what would happen on jobs which have the lowest wage. The Salary of the job has nothing to do with how much production a worker will be asked to contribute and much more with how easily replaceable the worker is.

As for the point that Economics is not Zero sum. It actually is. For one to gain, one must lose. For one to get a position, someone else must not. This drives a race to the bottom for the most desperate of workers.

Con then attacks the whole definition of employment and asserts his own. But by this definition, it's better with a system in which people work 12 or 16 hours per day to earn the base necessities for life, as this would somehow make the economy have more "employment". This makes very little sense. If we are to redefine employment, it would far better serve to call someone who can work enough to achieve at least the normal necessities of life as "employed".

Not to mention that the whole argument here does not counter my point, that more people would be forced to work more hours, thereby increasing supply and thus reducing the wages even more.

Con claims that a wage drop has nothing to do with lowering the minimum wage but in fact it does. It is a sister point, in the sense that lowering wages does not reduce unemployment and rising labour supply lowers wages.

Con argues that Real Wages are the only thing that matter and I have countered my own argument. Not at all, my argument is that the minimum wage does not affect unemployment for the worse. Not to mention that in depression periods, a lot of economic effects start working backwards.

Con then argues that less potential wages would give the incentive for entrepreneurs to create new enterprises. That is basically the argument that unless the capitalist can make more money with his money (requiring that workers make less money with their work), then he will decline to use it and thus keep back the economy. Putting aside for a bit what "growing the economy" means, the idea that the capitalist can somehow hold society hostage by withholding the wealth he has produced through society is something which is not immediately clear why it is a desirable situation. At least for me.

But what the Con says is in fact true, without sufficient exploitation of the workers, many will not wish to invest in an economy. Whether that is good or not is arguable, as someone could point to the Chinese or Indian economy and point out how nicely it grows since the workers are willing to work for scraps. But someone would also point out that nasty aspects of this "growing economy" and the dehumanization it forces on people.

In fact, there is a misunderstanding of how worker vs employer power works. Con assumes that the employer needs to "convince" the workers to come out from wherever they are. This is the classic fallacy of conflating unemployment with "leisure time" where the worker who is not working is having somehow a good time. This falls flat on it face outside of economic textbooks. Workers have a far higher drive to find work than the employer has to find workers. This is exactly why wages always race to the bottom and why lowered wages increase unemployment. The workers sitting at home doing nothing, does not need any more coaxing that his rumbling belly and his starving children. He will get whatever he can get a job, even a job that paying less than subsistence.

The classic example of the teenager is in fact exactly the wrong example to have. It is commonly brought up that the minimum wages prevent teenagers from finding some extra money jobs, but the truth is that a teenager, who does not need to work, is unlikely to go and get a job that pays 2$ an hour anyway. He most likely has better things to do. The teenagers who would consider such a wage, are in the same situation as the adults who would consider it as well, that is, in a very bad social situation where it's either getting whatever they can, or dying from starvation.

"Only abstract thought can effectively reproduce the other-things-equal assumption."

I do not know why you brought this up, but this argument is false. Abstract though cannot effectively reproduce science. This is why we have the scientific method. The fact that economists find it impossible to follow it, does not make their current methodology just as good.

In fact, even though it may be harder to use empiricism in economics, it is not impossible and it is something that needs to be attempted, rather than washing ones hands, declaring it impossible and sticking with imagined abstract thoughts and a priori axioms.

As luck would have it, it is through such research that it has been found that increasing the minimum wage does not lead to higher unemployment (http://books.google.com...)

"If more people are added to the category of those who I can employ at a profit rather than a loss, other things equal, I will employ more of them."

Sure, but the individual actions of on employer will not change the fact that more people will be seeking work and less people will be able to sustain their way of life with lowering wages.

And finally let me put a new argument. Keeping the wages of workers "artificially" high in fact can increase employment, rather than the opposite. This is because the workers are also the consumers. The more money they receive through wages, the more money they have to spend on commodities. This in turn allows more sales and thus more reason for businesses to open or expanded to fulfil the increased demand. Therefore, higher employment.
Ragnar_Rahl

Con

"Most other positions" being almost all. Very few jobs are presently minimum wage.

http://www.heritage.org...

Effectively 1 in 200 Americans presently has a minimum wage. Even if it were somehow possible to set off a cascading wage spiral, these are not the fellows to do it with.

"
You cannot judge the production of a worker before employing them"
By this argument no business should ever survive. There are rational grounds for expectations about how much one will produce.
A worker with a mutation that gives them natural blue skin is all but impossible to replace. Yet no one will employ him if his production potential is less than the salary he demands.

A football team can technically replace an All-Pro quarterback with Jeff Blake if they want to. He does the same job. But he doesn't produce nearly as much at it, which is why the all-pro receives a much higher salary.

"As for the point that Economics is not Zero sum. It actually is. For one to gain, one must lose. For one to get a position, someone else must not. This drives a race to the bottom for the most desperate of workers."
By this argument, the exact same number of jobs should be present now as were present in the Stone Age. The exact same quality too. Positions are CREATED. The better they are filled, the more will be created. If Bill Gates becomes CEO of Microsoft, thousands of absentminded software engineers get jobs too. If one of those absentminded software engineers becomes CEO, Bill Gates does not get employed, and neither do many of the thousands of other software engineers, because capital is being wasted on a business headed by someone who does not have the skillset to head it.. The two sums differ. Eventually the business collapses and gets bought out of course, but this has transaction costs and wastes time that could otherwise be used producing :).

You're still stuck on a binary definition, which is the root of the fallacy. Working enough to achieve the normal necessities of life is significantly more than the "everyone works one hour" example. Thus, they would be "more employed" than those people by my definition. Both are defined as "employed" by the traditional definition. But working enough to achieve luxuries on top of that is even more "employed" yet, which your redefinition does not capture, and mine does.

The "Everyone works 12 or 16" is not my definition, but the traditional one, you seem to be confused.
Abolishing laws which force people to reject volunteers is not a form of force. Offering employment is not a form of force. Increasing "supply," i.e. increasing the number of employable people (without increasing the number of people), makes productive potential higher, and does not at all in and of itself constitute a reduction of employment. Whatever reduction of wages occurs is outweighed by the greater number of people receiving them in this scenario, as economics, again, is not zero sum-- if the government does not stop it from happening, people will continue to produce as much as they can given their personality-- human desires are ultimately unlimited.

More people CHOOSING to work more hours, is more employment.

More people earning wages is ultimately a huge wage gain for those people. Since economics is not zero sum, those wage gains have to outweigh any fall in the price of the bleeding lower edge of current labor.

If something "Starts working backwards" i.e. in the opposite of the manner that was theorized, means that it working "forwards" was, for the purposes of general theory, an illusion, and the people who theorized it as a general phenomena rather than a temporary, going-to-reverse-one (the Keynesians were those people), are wrong.

Regardless of whether you find it "Desirable" to "hold you hostage" by refusing to be your slave and only using his talents and the products of those talents when you get something out of it, it is not a situation that is caused by the abolition of the minimum wage, it is prior to the minimum wage and the reason why it is recommendable. Employers (Capitalist is an ideology, not a profession), do not like to be told what to do. The less you tell them what to do, the better mood they will be in. And they are the ones who created the modern world. The modern steel worker has fewer skills than a medieval blacksmith, but a larger standard of living. Every penny of that difference is directly attributable to the greed of those more competent than he, and the fact that in order to fulfill that need they had to offer something better than the worker had before.

Nobody is forced to participate in any economy except a state-controlled one. Refusing someone the benefits of what they do not partake in is not a form of force.

And rationalproduction is not "Dehumanizing," it is the essence of what "human" means. Sacrificing to the herd, that can be found among cows and ants.

I was not comparing employment with leisure time, but the worker's prior profession.

The employer, when unrestricted, has the needs of his mind, the mind of a sort that together with others like it created the modern world, driving him to find workers to create what he sees possible to create and thinks worth creating. The common labourer has the needs of his mind, the mind that with others like it (many more like it than like the employer's exist) reached its pinnacle in medieval huts and handmade tools, driving him to find work. Decide for yourselves which drive is greater.

The classic example of the teenager (or young adult) is over half of those who presently earn the minimum wage, and probably even more of those who would earn less than it when the minimum wage was abolished. It is therefore the most relevant example.

$2 an hour is not something many likely to accept in the US today, and of those who would, none is presently employed.

The scientific method is useless in economics. The assumptions that it requires are not even close to being fulfilled in any economy. For all intents and purposes, economics is not a science, the scientific method cannot be used or replaced or enter into the discussion. Abstract thought, for better or worse, is all an honest economist has.

Strict, scientific empiricism is indeed impossible in economics. Humans are ultimately not controllable variables. The ATTEMPT, which you claim needs to happen, is known as totalitarianism. Anyone who attempts a controlled experiment in economics without consent should be shot, and if it's with consent it's automatically uncontrolled by that very fact.

The book you linked to was not a controlled experiment. Other things were not equal. Other changes in law aside from the ones having to do with the minimum wage were occurring. It falsely equates correlation and causation. Especially considering how skewed unemployment statistics are ( A large number of those most likely to benefit from drops in minimum wages are automatically dropped out of the statistics when they stop being employed, because they know they won't get jobs and therefore won't waste time "seeking" them).
Besides, it's essentially subconscious dishonesty by policy makers. They know that fallacious economists will do this. So what do they do? Set the minimum wage increases in times of growth :).
If you REALLY want to get some semblance of measuring the effects of the minimum wage-- make them big enough that their effects won't be obscured among other effects quite so much. Set the minimum wage to 1000 dollars per hour. Enforce vigorously. See what happens. It won't be fully valid, but more valid than current "research."

"
Sure, but the individual actions of on employer"
Employers become employers by acting in the manner I described.

To be cont. in comments.
Debate Round No. 2
db0

Pro

My opponent seems to confuse my saying that removing the minimum wage will reduce wages with me saying that most people earn the minimum wage. I very well know that the number of people earning the minimum wage is low (at least in the US, but this is far from being the case in other parts of the world) but this does not change my argument that by removing the minimum wage would be akin to dropping wages across the board. Both because those who earn the minimum wage will have it probably reduced, and also because the increased supply of labour (forced by insufficient funds) will further drive salaries down.

As for judging the production, one does not reward a position by what they think the person can produce, but rather by what they expect the position will produce. While small oscillations within the range of the original salary might happen depending on the interview, the salary expectations will have been decided long before the candidate is chosen. By claiming that the wage will be decided solely by the expected production of the worker and not of the position, my opponent shows a distinct misunderstanding of how job-seeking and wage-labour works. In fact what is more likely to happen is that the wage will remain the same (if we're talking about low skilled labour) no-matter the efficiency, initiative or stamina of the employee but will drop as soon as the employer finds an excuse for it by either the history of the worker or their mistakes, thereby showing the true decision factor of wages, the power difference of employer to employee.

Lastly, my opponent's example of a Football team somehow "producing" anything is weird to say the least and does not apply.

RE: Economics is zero sum: The reason we are not in the stone age, is not because exchanges of goods produced value. It's because human labour produces surplus value from what naturally occurs. This is the sole most important aspect of advancement of civilization and surprisingly the aspect which modern economics avoids the most. The ways by which human labour can create more value in the world and thus more opportunities for new jobs is another debate for another day. In our discussion though, it is whether the distribution of wage-positions in comparison to the available labour is zero sum. This is very much so, unless the labour of people can create more opportunities for them (ie more capital).

Con insists on bringing his own definition of employment in which it's better for more people to work more hours for the same amount of commodities as this is somehow better overall. Better for whom though? For those who work more for less? We are expected to believe this because "economics is not zero sum". This sentence is the totality of the argument Con is making at the moment and I have already explained why it does not stand.

He is also at pains to stress how "voluntary" the whole thing will be, but this is nothing more than consciously increasing the supply of labour in order to drops its cost. This is as "voluntary" as the workers banding together to pressure the state to pass minimum wage laws and the capitalists "voluntary" accepting this state of affairs. In fact, this has nothing to do with voluntarism and rather to do with the power struggle between workers and employers. Whereas the "invisible hand" is the weapon of the capitalist which will "voluntary" lower costs, the union and solidarity of the workers is the weapon of the worker which will "voluntary" increase them.

To prefer one to the other, is simply choosing which side one favours.

My opponent is confused also about the role of the Capitalist. It is irrelevant to argue the apologetics put forth other than to mention that all the things Con gives credit to the capitalist would have been impossible without the worker's labour and the society around them. A Capitalist only made a profit because a society was around to work and purchase it, as such, there's no excuse for them withholding the fruits of social arrangement until they can get even more of them.

For some reason, Con thinks that the Capitalist is some kind of genius superhuman, by who's brilliant mind society goes forward. I would ask him to read less of the ramblings of Ayn Rand and actually look at the real world instead of trivializing the most important aspect of civilization, which is the production and not the ideas. Everyone has ideas in their mind but it's the actual labour that makes them a reality. To assume that the Capitalist is the one who when unrestricted will lead us all to a brilliant future is to assume that there's two types of humans, and that this brilliance passes genetically as well (since wealth passes through progeny).
In fact, there's not difference between the Capitalist and its workers other than who owns the capital. Given the opportunity (ie sustenance and leisure), humans can innovate just fine without having to boss people around as well. This managed to happen for thousands of years before capitalists came about. So Nietzschesian dreams about Superhumans are really obsolete.

Con once again brought teenagers into the argument as somehow being the most relevant but never got around to showing that it is teenagers doing it for extra money, or desperate people taking every job they can get. I have shown in my original argument that the later is far more likely. Removing the minimum wage will only mean that those already desperate will have to work more for less.

Next my opponent attacks the motion that empiricism can be of use in Economics. This is par for the course for ideologues of the free market as the scientific method produces results that go against their ideology. Unfortunately this is why this kind of thinking is misguided. When reality and ideology conflicts, it is reality that must be wrong.

This can be seen by Con's quick dismissal of the study on minimum wage I have provided not because it is wrong, but because it conflicts with what he already believes. This is exactly what he shouldn't be doing though. When empirical studies conflict with our hypothesis, it must be the hypothesis that changes instead of simply ignoring reality and sticking to our previous theories that are obviously false.

Needless to say, human knowledge managed to truly progress once we've learned to create theories according to reality rather than the other way around. It's unfortunate to say that mainstream economics has still not reached this level of investigation but has to rely on schools of thought (Keynesianism VS Austrians VS Neoclassicals VS Monerarism etc), very much like the Greek philosophers of the classical age.

Finally, my argument on wages actually increasing employment still stands. My opponent had to move to the comment field of the debate as he couldn't stay within the character limit. I do not know the netiquette of Debate.org on this issue but I expect this is bad form?

Since I have some space left, let me remind the audience that my task is to simply show that removing minimum wage laws will not increase employment, not to defend the whole concept of minimum wage or argue for its increase. I am stating this because the flow of the argument seems to be moving towards a direction where it may seem so.
Ragnar_Rahl

Con

You state that removing the minimum wage will lead to some kind of race to the bottom, which has not occurred without it. This would require minimum wage earners to be a significant phenomena no? No confusion necessary.

I have stated that hiring is based on expectations on what will be produced. "
As for judging the production, one does not reward a position by what they think the person can produce, but rather by what they expect the position will produce." Is a straw man. (Incidentally, specific rewards can be altered after the fact when it becomes clearer just how much is produced. Wise employers, when not prevented by state-sponsored unions, contract to tie pay to performance).

The "position's" expectations as opposed to the individuals are irrelevant. Individual ability determines what sort of position they will pursue.

Football teams produce entertainment, a good like any other, measurable in how much fans spend on games, how many watch advertisements, purchase memoribilia. They run according to the same economic laws as anyone else.

Human labor producing "surplus value" is DEPENDENT upon the fact of human exchange. Without human exchange there can be no division of labor, without division of labor we remain in the stone age.

Since the "distribution of wage positions" is decided based on what will likely cause labor to produce the most value at the least cost, my opponent concedes that it is not zero sum in stating that labor producing more capital is an exception to the zero sum "rule."

My opponent presents a straw man in stating that I hold it is better for more hours to be worked in exchange for the same number of commodities. I stated the more hours part. Obviously this tends to imply more commodities.

By definition, the passing of laws is not voluntary. More people being permitted to work is not equally voluntary as laws forbidding people from working (which is what minimum wage laws are in effect-- they banish the lowest tier from consideration for employment). The invisible hand is a worker's judgment as to which course of action will get him the most value. Calling it a "weapon" is a misnomer.

It does not follow from the fact that an employer benefits from society to call profits a "fruit of society." It is a fruit of cooperation between employer and employee. It will not be "withheld" when an employer does not act, it will simply not exist unless both parties consent. There will be nothing to withhold.

Everyone has ideas, but very few of them have ideas that work. Ideas are not homogenous. Neither is labour. The statement that the employer and others like them are the fount of the modern world is not an "assumption," it is based on the fact that if they weren't, the products of such a world would be purchased more cheaply from someone else. The employer commits a special form of labour in producing ideas that do work.

Wealth does not automatically pass through progeny. Inheritance is an expenditure for affections, it can be withdrawn when those affections are no longer wanted or found insufficient (frankly I advise the wealthy to stop wanting it.

Stating that there is no difference between employer and employee other than "who owns the wealth" is nonsensical. Wealth does not spring forth from the head of Zeus. The employer had to do something that the employee did not in order to get that wealth (If it is inherited, the one who originally held the wealth did, it is they who are relevant. Heirs are essentially just another form of employee, a rather worthless one I'd say, but I am not every employer, others may have different psychological needs to continue their acts of production).

Again, my R1 source, which has no motive to mislead since it would be inspected and debunked if it had, stated that over half of minimum wage earners are under 23, i.e. entry level. "Over half" is highly relevant.

The scientific method does not produce results in economics that go against the free market, because it produces no results. It has never been used.

I provided my reasoning for dismissing the study you linked, it did not include "It disagrees with me." Stating
"This can be seen by Con's quick dismissal of the study on minimum wage I have provided not because it is wrong, but because it conflicts with what he already believes." is a disgusting mix of ad hominem and straw man. When empirical studies do not follow the scientific method (It's steps can be found here: http://www.sciencebuddies.org... Note that no experiment occurred in the source linked by my opponent.). No "empirical study" has ever lived up to the scientific method in economics, none ever can.

If you wish to abandon the trail that seems to have begun around your R2 response of discussing side issues, I suppose that's all right :).

"
Finally, my argument on wages actually increasing employment still stands."
No, it does not. You have not addressed my rebuttal to it I so far attached. Perhaps I should clarify--
Artificial increases in the money supply cannot be sustained. They must eventually contract. This causes recessions, which cause unemployment essentially proportional to the employment of the boom, plus frictional costs which also reduce employment for some time, which leads to an average loss of employment over the period. If we follow my opponent's argument that employers actually as a primary effect pay workers more when minimum wages occur (instead of just cutting out on workers they would otherwise pay less than it), this means that overall and specifically for the course of the next recession, since more has to be borrowed in one sense or another to fund the increased payment, unemployment would be reduced by not having the minimum wage. If we don't, then unemployment is reduced by not having the minimum wage across multiple time spans.

It should also be noted that minimum wages still are not automatically paid by employers. Since a higher minimum wage means employers must have higher standards for their employees to justify it, this means fewer hires occur initially, and thus fewer wages are paid, and thus the purchasing power increase which is supposed by your argument to cause further employment never occurs overall.

The sole standards of conduct for anyone's reference on DDO can be found here (the strong contractual ones): http://www.debate.org...

and here (advisory ones): http://www.debate.org...
Debate Round No. 3
db0

Pro

I have already explained that the supply of labour will increase if minimum wage workers have their salaries reduced. I have already explained how increased supply of labour will drive down its costs, effectively reducing wages in the close to minimum wage jobs. My opponent has yet to counter this. He makes the mistake of assuming that higher than minimum wage cannot be assigned in anything other than unskilled labour. But there's also dangerous jobs, or unwanted jobs or any other host of them who have higher than minimum wage with unskilled labour. As the supply of labour increases and more and more unskilled (or incorrectly skilled) people become desperate for work, so will the wages of all these jobs drop.

My opponent tries to argue against the fact that positions are rewarded according to the job expectations other than the person by putting forth a perfect system of laissez-faire capitalism. Needless to say, this is not the system that exists, nor the system that we are discussing now. As such arguments which would make sense in such as system are irrelevant.

Con is under the impression that surplus value cannot exist without exchange. This is false. The surplus value is created in production, not in exchange. The exchange value of it is certainly realized during exchange but that does not change the fact of how and why it is produced, nor does it prevent the division of labour. Certainly, I do not claim that no exchange should happen, but this does not change the fact that the distribution of wage positions is zero-sum. One must lose a positions for someone else to have it.

My opponents argument thus seems to be "It is better to have more people working for less reward, because the capital commodities they produce, will allow even more people to work". But those extra people who work, will work more for less as well. Furthermore, the effect of capital production has hitherto been the requirement for *less* people to work on the same production, not more, something which will further increase the supply of labour. In short, my opponent's support for zero-sum based arguments will mean that we'll have a progress for people working more time, for less money. Not a favourable result in any sense of the word.

Con makes the weird argument that the only voluntary act is market exchange. Apparently it is impossible for people to band together to create rules and laws. I believe I do not mean to point the weakness of this argument. He further makes the fallacious argument of equating minimum wage laws with preventing people from working. This is based on the argument that no law is voluntary. Taken to its logical conclusion of course, such an argument would mean that the laws protecting private property are preventing people from working (as they would use the now unowned capital themselves). Con thus is attempting to have his cake and eat it. He is picking and choosing which laws are "voluntary" according to his personal beliefs.

Con further claims that the invisible hand is the worker's judgement. But the worker's judgement works whether we have minimum wage or not. In fact, it is precisely because the worker's judgement is formed on the circumstances the worker is in, that it is the existence or non-existence of labour-friendly laws that is the "weapons" I was talking about before. The "invisible hand" thus will work whichever the environment but we are expected to believe that a worker-unfriendly status quo is...better for the worker.

My opponent insists on claiming that the wealth of the capitalist has nothing to do with the society. He seems to ignore concepts such as education, recreation, public transportation, security and all the other provisions of a societal system that capitalist does not have to pay for but requires in order to have productive workers to hire and wealthy consumers to sell to. To think that a capitalist/worker relationship is independent of the society around it is absurd.

Con persists in claiming that the the capitalists are the "fount of the modern world" just because they could make profit. In fact, the capitalist system is indeed the reason for all the luxury available in the first world, as well as for the suffering on the third[1]. The only reason why so much more wealth managed to be produced, is not because of the ideas of the capitalists, most of which existed just fine before them, but because the workers at the onset of the capitalist mode of production had to work more, for less. Whereas before Artisans and Farmers had quite a prosperous production and development without the need for capitalism[2], they didn't achieve the kind of luxury and destruction we have now because there was no need for hyper-exploitation. People worked as much as they could, rather than as much as their boss wanted.

It is not the ideas or the superhuman icons of Randian dreams but rather the increased and extended labour of humans who did not get to keep their full reward, Something which required extended violence and oppression to achieve in place of what was there before[3]. This (The hyper-exploitation, not the violence) is incidentally what Con is suggesting in his arguments on how good it is for people to work more for less.

Con makes the weird argument that wealth does not automatically pass to progeny. True enough. It usually requires progeny that proves to be as greedy as their parents. I do not see how that counters the fact that wealth is normally not a result or "rugged individualism".

He then argues that the wealthy had to do something worthwhile to earn his position. True, most often than not that something was state backed violence and misappropriation [3], Fraud [4], or simple inheritance and privilege [5]. It is unlikely though that one deserves more wealth just for having wealth now.

I've already pointed out why Con's R1 source does not back up the claim that minimum wage is costing jobs to people as it could simply point out the increased desperation of low skilled, low experience workers which lead them to take the worse jobs.

My opponent argument against the scientific methods seems to be that it's impossible for any empirical study on the economy to have any effect on one's current ideas about how economics works. Much like Ludwig Von Mises said that his a-priori assumptions (axioms) cannot be refuted by reality [6] so does Con's belief about how economics work withstand the test of experience. With sheer stubbornness.

And finally for my opponent's argument that artificial inflations of the money supply are not sustainable - and this somehow countering my argument that having a minimum wage can bring increased wealth for workers and thus increased purchases - well it does not counter it in the least. My opponent assumes that the capitalist will simply borrow more or that the money supply will rise. However neither of which follows from having a minimum wage. It could just as well mean that the capitalist simply lives with decreased profits, especially if the position was already profitable.

In short, my opponent simply assumes that current wages on unskilled labour are the workings of a free market, rather than the effects of bargaining differentials. But in fact, the later is far closer to the truth as we do not in fact have a free market and the workings of the "invisible hand" are already skewed far enough to the benefit of the employees, simply because of their increased wealth and by extension lobbying power. As such, labour-friendly laws serve to counter that and bring things closer to equality.

1. http://www.greenleft.org.au...
2. http://www.amazon.com... - p225
3. http://en.wikipedia.org...
4. http://en.wikipedia.org...
5. http://books.google.com...
6. http://www.amazon.com... pp. 39-40
Ragnar_Rahl

Con

Apparently my opponent has ignored that increasing the supply of labor without increasing the number of people BY DEFINITION counters unemployment, and likely to increase the number of wage recipients more than it will reduce wages.

I never assumed wages above minimum are exclusive to skilled ("unskileld' is an obvious error in my opponent's sentence."

My arguments do not rely on a laissez faire system. Any semblance of a market will do here.

Exchange IS the basis on which division and specialization of labour occurs, it would be impossible without it-- and this is a force which increases the amount produced, contrary to zero-sum economics. If one HAD to lose a position for someone else to have it, it would either be true that all positions available had always existed, which is obviously false (There was no CEO of Microsoft 10000 years ago, or indeed 50), or it would be true that no positions could ever exist (Since no new positions could be created in a zero-sum world). That too is untrue. Therefore it is untrue that every obtaining of a position requires someone to lose it first.

If 10 people work for 11 dollars an hour, this is more money in the system than 1 working for 12. And, more employment.

"Furthermore, the effect of capital production has hitherto been the requirement for *less* people to work on the same production, not more, something which will further increase the supply of labour."
The effect of capital production?
That wasn't coherent.
Adding the possibility of hiring lower skilled people means that per unit of production more of them need to be employed. Of course, it's new production-- none need stop producing in other directions, so this is irrelevant. "Increasing the supply of labor," in the absence of bringing new people into existence, is synonymous with reducing unemployment.

"
Con makes the weird argument that the only voluntary act is market exchange. Apparently it is impossible for people to band together to create rules and laws."
By definition, laws are made to restrict someone who didn't volunteer for them. Laws are not made unanimously. Dissenters are shot or imprisoned.

"He further makes the fallacious argument of equating minimum wage laws with preventing people from working.
Minimum wage laws: Thou shalt not work if no one offers you more than this amount.

:This is based on the argument that no law is voluntary. Taken to its logical conclusion of course, such an argument would mean that the laws protecting private property are preventing people from working (as they would use the now unowned capital themselves).
Robbery, unlike production, is zero sum. And since production is a criteria positively correlated with property (considering how one acquires property by producing it), less work is prevented than is protected by protection of private property. In any case this is irrelevant.

"He is picking and choosing which laws are "voluntary" according to his personal beliefs."
Incorrect. No law is voluntary, including the laws protecting private property. The question is whether the use of force to protect property is justified-- not whether it is force.

"
Con further claims that the invisible hand is the worker's judgement. But the worker's judgement works whether we have minimum wage or not."
Incorrect. If the worker judges that he will gain from working for a wage offered to him of the amount: (insert amount less than the minimum wage), in the absence of a minimum wage law his judgment will stand. In the presence, it will not.

"
My opponent insists on claiming that the wealth of the capitalist has nothing to do with the society. He seems to ignore concepts such as education, recreation, public transportation, security and all the other provisions of a societal system that capitalist does not have to pay for but requires"
All of those are things the employer could pay for if they were not provided by tax dollars. Thus, not "dependent." "Society" is just vagueness, not an entity, by the way. Government presently provides those.

"
Con persists in claiming that the the capitalists are the "fount of the modern world" just because they could make profit. In fact, the capitalist system is indeed the reason for all the luxury available in the first world, as well as for the suffering on the third[1]."
This is incoherent. The suffering preceded the existence of anything remotely resembling capitalism.

"but because the workers at the onset of the capitalist mode of production had to work more, for less."
Then why did they rush toward the cities and away from their old, precapitalist careers?

"Whereas before Artisans and Farmers had quite a prosperous production "
no, they did not. They had a standard of living much less than those afterwards. Otherwise, no one would have quit those jobs in order to work in more modern ones. Sourcing a statement does not make it true.

"
It is not the ideas or the superhuman icons of Randian dreams but rather the increased and extended labour of humans who did not get to keep their full reward"
Increased-- by the deromanticized equivalents of those icons, entrepreneurs. By the ideas created in factories. Farmers worked all day for things nowhere near what a modern worker of much less skill and hours receives.

"omething which required extended violence and oppression to achieve in place of what was there before[3]."
It is not oppression to acquire property. It is violence to enforce it-- because it is violence to violate it, and violence must be met with violence. "Common land" is incoherent.

"This (The hyper-exploitation, not the violence) "
Exploitation-- the noticing of an opportunity to improve upon a bad situation.

"
Con makes the weird argument that wealth does not automatically pass to progeny. True enough. It usually requires progeny that proves to be as greedy as their parents. I do not see how that counters the fact that wealth is normally not a result or "rugged individualism"."
Wealth is ALWAYS ultimately a result of an individual action. It can pass on to those unworthy of it-- this does not alter it's source.

"
He then argues that the wealthy had to do something worthwhile to earn his position. True, most often than not that something was state backed violence and misappropriation [3], Fraud [4], or simple inheritance and privilege [5]'
Sourcing a thing does not make it true. Fraud and inheritance are both by definition dependent on someone else to do the creative act, as are appropriation, in any case, so the point stands about the nature of who makes the wealth, regardless of what happens afterward.

My R1 source wasn't supposed to back any claim except the ages of those who accept minimum wage.

Your link to 6 tells us nothing relevant. and there IS NO EXPERIENCE RELEVANT. That is the point. There is no test to withstand. Calling anything attempted so far in economics "scientific" is refuted by the reality of what science requires-- controlled experiments, which cannot occur with humans, and cannot morally even be attempted.

Employers invest many of their profits. If my opponent's arguments require "employers living with decreased profits," this means that investment decreases-- which means jobs disappear--which means unemployment rises due to minimum wage-- which means removing it causes reduction in unemployment.

My opponent simply assumes that "bargaining differentials" somehow override the laws of economics-- and HE is Pro, he has the burden of proof.

We indeed do not have a free market, this does not mean that in the matters in which we are analogous to one, we do not operate by similar laws. Ultimately "bargaining power" is a bit of an absurdity anyway-- by definition, a bargain requires that neither party has the power to make anyone do anything.
Debate Round No. 4
21 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Ragnar_Rahl 5 years ago
Ragnar_Rahl
People who won't earn more than the minimum wage when there isn't a minimum wage won't earn it when there is, they'll just be unemployed, so your supposed "increase" of unemployed comes from those-- already unemployed. Law can't change what an employee is worth to an employer.
Posted by db0 5 years ago
db0
That's actually a pretty good argument Antony. I'll use it in the future.
Posted by SirAntonyP 5 years ago
SirAntonyP
Abolish the minimum wage?

Are you serious?

All that will accomplish is more starving people and a even bigger poor to rich gap.

Unemployment will rise for a fact, because i wont work for pennies i would rather do something illegal, take the risk of being imprisoned and make more money than work basically as a slave and feel imprisoned all my life.
Posted by Ragnar_Rahl 5 years ago
Ragnar_Rahl
It's impossible to ignore the technical aspects. Ignore at qua rule on the other hand...
Posted by Lexicaholic 5 years ago
Lexicaholic
Just posting here to bookmark this debate for review once it is completed.
Posted by db0 5 years ago
db0
RR: The Char Limit of the Debate WAS mentioned. It is not just mentioned, it's impossible to ignore!
Posted by db0 5 years ago
db0
In the last pagraph, sentence should be "the workings of the "invisible hand" are already skewed far enough to the benefit of the employers"
Posted by wjmelements 5 years ago
wjmelements
Such a silly policy the minimum wage is. I'm probably done debating it after I am done with my current debate. It is a limited topic when put into perspective.
Posted by Ragnar_Rahl 5 years ago
Ragnar_Rahl
"If we don't, then unemployment is reduced by not having the minimum wage across multiple time spans."
Probably should've rephrased that as "without respect to time span."
Posted by Ragnar_Rahl 5 years ago
Ragnar_Rahl
Incidentally, if I had to ask about every possible rule that wasn't mentioned instead of assuming "if there is no rule against it it goes", there would be thousands of comments already, and that's just from me.
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