The Instigator
Victorian
Pro (for)
Losing
0 Points
The Contender
black_squirrel
Con (against)
Winning
3 Points

Minimum Wage Laws Harm the Poor

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Post Voting Period
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after 1 vote the winner is...
black_squirrel
Voting Style: Open Point System: 7 Point
Started: 2/25/2014 Category: Politics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,473 times Debate No: 46732
Debate Rounds (4)
Comments (8)
Votes (1)

 

Victorian

Pro

I will be arguing pro for the position that laws mandating a minimum wage cause poor people to have less wealth than they would otherwise.

First round for acceptance only.
black_squirrel

Con

I accept. Good luck.
Debate Round No. 1
Victorian

Pro

I would like to start by thanking my opponent for engaging in this debate.

Minimum wage laws increase unemployment. The reasons for this are simple. Many workers simply do not have the job skills to add more than a few dollars of value to the business they work for per hour. A low skilled worker who can produce only $4 of value per hour will not be hired for $8 per hour. Thus, an increase in minimum wage often makes these workers a liability, creating an incentive for employers to cut jobs. Some economists counter that workers are human beings, and the human element of firing workers is powerful enough to discourage employers from doing so. This is often true, but it misses the real problematic effect that minimum wage has on unemployment. While a few workers do lose their jobs due to minimum wage increases, the vastly bigger problem is that many workers who otherwise could have found jobs cannot find them because the minimum wage is too high. Essentially, the issue is not so much the incentive to fire workers, but the DISINCENTIVE to hire workers in the FUTURE. The negative impact of raising the minimum wage is not nearly as dramatic as the negative effect of having a minimum wage in the first place.

Economists are divided over the extent to which increases in minimum wage affect unemployment. Many left-leaning economists argue that the effect is very small. Unfortunately, the poor are disproportionately hurt by the minimum wage, meaning that even if the overall effect of minimum wage on unemployment were very small, the poor would still be significantly hurt. Data from the Statistical Abstract of the United States (up until the program was discontinued in 2011) and the Bureau of Labor Statistics show no correlation between minimum wage levels and unemployment among college graduates, but they do show a significant positive relationship between the two for workers who graduated from high school, but not college, and the relationship is even more dramatic among workers who did not graduate from high school. (i.e. years in which the minimum wage was higher there was higher unemployment) This makes sense, as college graduates are the most skilled workers and are thus very unlikely to be affected by minimum wage, while poor workers who generally have fewer marketable skills and cannot add as much value to their business, are at risk of losing, or not finding, a job due to minimum wage laws.

As college graduates make up more than 30% of Americans, http://www.nytimes.com... this enormous number of high skilled workers makes unemployment statistics for the population as a whole significantly lower than they are for poor low skilled workers.

Readers who are still unconvinced that minimum wage laws cause unemployment can consider a real life experience that we are all familiar with. From the perspective of the owner of a fast food restaurant, it makes sense to hire a low skilled high school worker for a few dollars per hour. But if the employer is required by law to pay at least $7 per hour, adults (who have more expenses than teenagers) will become interested in the job. This means that when hiring a new employee, the employer will be presented with the choice between a teenager (with little work experience) and an adult (who will almost certainly have more work experience). Very few sane employers will chose the lower skilled teenager over the higher skilled adult. A few decades ago, most jobs in the fast food industry were held by teenage high school students. Now, due to increases in minimum wage, very few are. There are now so many fast food workers with families that there is a growing movement in the industry to demand a wage high enough to raise a family on. This is a classic example of how low wage workers suffer from minimum wage laws.
Teenagers are the usually the lowest skilled group in the labor market and are therefore severely affected by minimum wage. Analysis of all 50 states shows that on average, states with minimum wage levels higher than the federal minimum have significantly higher rates of teen unemployment than those at the federal minimum. http://consultingbyrpm.com...

Many teenage workers come from middle and upper class households; this example only serves to illustrate how low skilled workers such as teenagers and poor people are negatively affected by minimum wage laws. However, it is worth noting that some of the teenage workers come from poor households. Taking away their chance of earning money and valuable work experience makes higher education, one of the best paths out of poverty, even more unattainable.

To summarize, minimum wage laws harm the poor by increasing unemployment among poor people, discouraging future employment, especially among poor people, and forcing young people out of the workforce, thus decreasing social mobility.

Many workers do keep their jobs and receive a higher salary (though many companies compensate by cutting benefits) due to minimum wage laws. However, even for them, the benefits are often not as dramatic as they are claimed to be. Rather than raising wages, minimum wage laws often merely get rid of industries in which labor is simply not worth $8 per hour. In twentieth century Spain for example, whole fish processing industries disappeared when the fishing companies were required to pay large salaries and benefits. The companies simply sold lower quality fish as consumers were unwilling to pay enough for processing, as it would have taken to pay the workers.

More importantly, increases in minimum wage cause inflation. Every 10% increase in minimum wage is matched by a 4% increase in price level. http://ideas.repec.org...
This means that even workers who keep their jobs and receive higher salaries are only 6% better off, not 10%. Those who lose their jobs, were already unemployed, or are retired are 4% WORSE off. Given that so many poor people are unemployed, this calls into question the efficacy of minimum wage laws as an anti poverty tactic.

Undoubtedly, some poor people are benefited by minimum wage laws, but it is important to remember where these benefits come from. The general public believes that the benefit that a few workers receive from minimum wage laws comes from the business owners and patrons, (the middle and upper classes) While this is true to some extent, a very substantial part of those benefits come at cost to other poor people who are forced out of the labor market or are forced to pay higher prices. If we designed a policy that divided the poor into two groups, and took all of one group"s money to distribute it among the other group. This would help a lot of poor people, but it could hardly be considered a poverty alleviating program, even if a few dollars from other sources were thrown into the distribution.

If minimum wage laws harm the poor, why did anyone create them in the first place? The answer, sadly, is that they were intended to hurt the poor. English labour politicians believed that forcing disabled and incompetent workers out of the work force would empower unions, by making it harder for employers to find scrubs to hire during strikes. In South Africa, white labor unions supported minimum wage laws expressly because they would force the generally low skilled black laborers out of work. Over time, the misinformed public came to believe that minimum wage laws are a gift to the poor.

Minimum wage laws have set up a system in which people have jobs inappropriate to their skill level. Changing this system might cause temporary hardship, but it is important to remember the soviet woman in a breadline who turns to her friend and says, "You think this is bad. In capitalist countries, the government doesn"t provide any bread at all!"
black_squirrel

Con

I thank my opponent for having this debate.

the obvious

First of all let us state the obvious. If A poor person who works for the minimum wage has a salary increase, then his/her wealth will be increased. So the idea that minimum wage laws harm the poor is counter intuitive.

unemployment

My opponent argues that an increase of the minimum wage leads to more unemployment (among the poor). This is a result of the market economy. If the price of labor increases, the demand will decrease (fewer jobs) and the demand will increase (more people seeking jobs). In particular, some poor people may loose their job and their income may decrease.
The question one should ask are:
1. How big is the increase in unemployment for poor families?
2. What is the economic impact of the increased unemployment for poor families?
3. Does possibly negative economic impact of increased unemployment outweigh the positive economic impact of increased salaries for poor families?

1. How big is the increase in unemployment for poor families?

Among leading economist, only 34% think that it would be noticeable harder for low-skilled workers to find employment if the minimum wage were increased (32% disagree, 24% uncertain). Whether there is a significant increase in unemployment is not clear and there is no consensus on this among economic experts.
(My source is a survey among the IGM Panel of economic experts [1]. The panel has both 'liberal" and "conservative" economists.)

Also unemployment among poor people does not necessarily reflect a lack of

2. What is the economic impact of the increased unemployment for poor families?

Poor people who lose a job will have less income. However, they probably will qualify for more government assistance.
The difference between minimum wage, and welfare is often not that large. In fact, in 35 states, welfare pays MORE than the minimum wage. [2] So for poor families, loosing a job will only have a small economic impact.

3. Does possibly negative economic impact of increased unemployment outweigh the positive economic impact of increased salaries for poor families?

In a survey among economic experts, the following question was asked:

"The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy."

In the survey 47% agree/strongly agree and only 11% agree/strongly disagree.


rebuttals

PRO: "Economists are divided over the extent to which increases in minimum wage affect unemployment.. Many left-leaning economists argue that the effect is very small."

Actually, some prominent conservatives favor an increase of the minimum wage. [3] Not because it would be better for the poor people (because of course they could not care less.), but because it would save the government money. Basically, there are many workers that earn the minimum wage, whose income is supplement by the government to have enough to make a living. If the minimum wage would be increased, the government would have to supplement less money. For such a worker, the increase will have no effect ((s)he does not care where the money comes from, government of business). However, if the government saves money, it could allocate the savings to increase benefits for poor people. (Of course, the conservative proponents of the minimum wage increase rather would see tax-cuts...)

PRO: "Many teenage workers come from middle and upper class households; this example only serves to illustrate how low skilled workers such as teenagers and poor people are negatively affected by minimum wage laws."

PRO: "This means that when hiring a new employee, the employer will be presented with the choice between a teenager (with little work experience) and an adult (who will almost certainly have more work experience). Very few sane employers will chose the lower skilled teenager over the higher skilled adult."

These statements actually support my case. An increase in minimum wage will move jobs from snotty teenagers (generally not poor) to more experienced poor adults. This means more income for poor families.


summary

An increase of the minimum wage will result in:
1. More income for people with minimum wage
2. Possibly an increase in unemployment, but those poor people who do loose job will only have a small negative impact because they qualify for more government assistance.
3. Overall, the increase in income will outweigh any negative economic impacts because of increase of unemployment.




[1] http://www.igmchicago.org...
[2] http://www.forbes.com...
[3] http://www.huffingtonpost.com...


Debate Round No. 2
Victorian

Pro

My apologies for poor source formatting in the second round; I ran out of characters.

Rebuttals:

A poor person who receives a wage increase from an increase in minimum wage will indeed have increased wealth. However, not all minimum wage workers will keep their jobs after a minimum wage increase. And for those who do, I would argue that minimum wage laws, while giving the illusion of necessity, often only serve to increase the wages of workers who would have seen their wages increase anyway. Talented workers (those least likely to lose, or not be able to find a job because of minimum wage laws) can receive wage increases through promotions, bonuses, or finding a higher paying job. In fact, supporters of minimum wage laws in the United States originally portrayed the minimum wage as a starting point from which employees would move upward, not a long term salary. We could create a Department of Candy, to teach children that candy tastes good. But it would be foolish to believe that children would not still enjoy candy if this department were abolished. Much of economics is counterintuitive.

My opponent states that increases in minimum wage lead to increased unemployment among the poor because of the market economy. This is completely true, but I do not understand the point my opponent is trying to make, unless he is proposing doing away with the market economy, in which case the issue of minimum wage seems superfluous.

My opponent states that "If the price of labor increases, the demand will decrease (fewer jobs) and the demand will increase (more people seeking jobs)." I assume that my opponent knows this, but just to clarify, demand for employees is NOT the same as demand for employment. Demand for employees is good for workers and is lowered by minimum wage laws. Demand for employment is bad for workers, and I argue that this demand is increased by minimum wage laws due to increases in unemployment.

1. How big is the increase in unemployment for poor families?

This is difficult to measure because minimum wage laws have been in place in the United States for such a long time. However, the Congressional Budget Office estimates that an increase (remember, this is only an increase from existing minimum wage, it does not take into account the effects of having a minimum wage in the first place) in the minimum wage to $10.10 per hour would decrease employment by approximately 500,000 workers. [1] In 2012, there were 1,600,000 workers earning the federal minimum wage. [2] People who lose or cannot find jobs due to minimum wage increases are those who are looking for minimum wage jobs, thus the vast majority of those 500,000 jobs will be taken out of the current 1,600,000 if the federal minimum wage is raised to $10.10 per hour.

2. What is the economic impact of increased unemployment for poor families?

My opponent argues that policies that cause unemployment among the poor are not so bad, because those people can receive welfare. This argument confuses the issue. Welfare programs help the poor, this does not change the fact that minimum wage laws, in and of themselves, hurt the poor.

3. Do the possible negative economic impact of increased unemployment outweigh the positive economic impact of increased salaries for poor families?

My opponent states that "only" 34% of economists believe that an increase in minimum wage would make it noticeably more difficult for low-skilled workers to find jobs. This is extremely misleading as this "only" 34% is greater than the percentage of economists who believe it would NOT be more difficult. (32%) There is no consensus among economists on this issue, but the most held opinion is that increasing the minimum wage WOULD cause difficulty to low-skilled workers.

My opponent cites a survey indicating that 47% (I would not that this is not a majority) of economists believe that a $9 per hour minimum wage would be better than the current rate of $7.25. I think that this misses the point of this debate. The issue at hand is minimum wage, not an increase in it. Claiming that an increase in minimum wage would help the poor is very different from claiming that having a minimum wage law in the first place helps the poor. Minimum wage laws have created a system in which people are in jobs that do not necessarily correspond to their talents or skill level. Given this disordered status quo, very small upward adjustments in the minimum wage could theoretically help workers, but only because those workers are already in the wrong jobs. (e.g. people trying to raise families on fast-food jobs) Workers would be better off with a more functional system, without any minimum wage laws in the first place.

Rebuttals to Rebuttals

The opinions of some right wing economists are unrelated to the empirical issue of the effect of minimum wage laws on unemployment.

My opponent argues that increased unemployment among teenagers is not a bad thing, because those jobs might be taken by poor adults. While I disagree with this view philosophically, I would also like to point out that unemployment among teenagers is only one particular example, showcasing the effects of minimum wage on low-skilled workers. The economic laws that apply to teenagers apply to all low-skilled workers, adult and otherwise.

Also, teenage joblessness often inhibits social mobility.

Sources:
1. http://cbo.gov...
2. http://www.bls.gov...
black_squirrel

Con

I will keep this short and let numbers do the talking. Economics is all about numbers....
1. On the one hand, raising the minimum wage will increase the income of poor families.
2. On the other hand, some workers with low wages may lose a job when the minimum wage is raged.
The crucial question is, which of the two effects is bigger? For that we have to do the math....

Since my opponent cited [1], we both agree that this is a reliable source.
First of all, on page 2 of that report, it states that there will be 900,000 people less under the poverty treshold, if the minimum wage is raised to $10,10 (even though unemployment may rise). This confirms my position.

But a simple calculation also shows that poor families will be better of after raising the minimum wage.
Suppose that 500,000 people lose their job. These will be people with low incomes, but of course not necessarily people who earn the federal minimum wage of $7.25/hr. Some of the people who lose jobs may earn $8, $9 or $10 an hour or even higher.

In 2010, 15.1 percent of all people in the USA lived in poverty. [2]
Increasing the minimum wage will not only affect the people who earn minimum wage, but also affect the people who earn slightly more. If a $7.25 employee from a fast-food chain gets his wage increased to $10.10, then his/her manager, who earns $9/hr probably also will see an increase to at least $11/hr.
Let's assume that the people with the 10% lowest wages will have their wages increased by $2/hr on average.
10% of 155 million people is 15.5 million. So in total, they earn $31 million/hr more.
On the other hand, 500,000 of them will lose their job. They will earn $10/hr less (pessimistic estimate: they will earn on average $8/hr, and their salary will not go down to $0 but to something above that because they qualify for government assistance).
So that is a total loss of 5 million dollars/hr. So the net gain is 31-5=26 million dollars/hr.

Of course this is just a rough calculation, but the more precise calculations were don by the CBO, and they came to the conclusion
that 900,000 people will be lifted out of poverty!

rebuttals

PRO:
My opponent argues that policies that cause unemployment among the poor are not so bad, because those people can receive welfare. This argument confuses the issue. Welfare programs help the poor, this does not change the fact that minimum wage laws, in and of themselves, hurt the poor.

I think the question is, what would change if we change the minimum wage laws with all other laws unchanged. The positive effect of an increase of wages for the poor is clear. On the other hand, the negative financial impact of higher unemployment is dampened by the existing welfare programs. The overall financial impact of minimum wage laws for poor families is positive.

PRO: The opinions of some right wing economists are unrelated to the empirical issue of the effect of minimum wage laws on unemployment.

True, but I only pointed out that some right wing economist support minimum wage increases, because my opponent suggested that only liberal economists believe that the impact of the minimum wage increase on the unemployment is small.

conclusion

The numbers just don't add up for my opponent.













[1] http://cbo.gov...
[2] http://www.npc.umich.edu...
[3] http://www.dlt.ri.gov...




Debate Round No. 3
Victorian

Pro

It seems to me that my opponent is still confusing the issue. The question of whether an increase in the minimum wage would help the poor is very different from the question of whether or not the poor would be better off if there were no minimum wage in the first place. My opponent appears to be arguing an issue that is not the topic of this debate.

Aside from this false premise though, my opponent"s numbers are seriously flawed. First, his math is wrong, because he calculates the increase in income before accounting for a decrease in employment. Even using my opponent"s numbers, the total gain should come out to $25 million per hour, not $26 million. (Because 500,000 should be subtracted from 15.5 million before it is multiplied by two. 15.5-.5= 15 15*2=30 30-5=25) Also, the $30 million number does not account for inflation. According to studies I have cited previously, every 10% increase in the minimum wage leads to an approximately 4% increase in price level. Increasing the minimum wage from $7.25 to $10.10 per hour is a $2.85 or 39.3% increase which will lead to a roughly 15.7% increase in price level. This means that the real benefit to poor workers, even using my opponent"s numbers is only $21.075 million per hour.

But the real problem with my opponent"s argument is not mathematical errors, but that his numbers are wrong. My opponent says "Let's assume that the people with the 10% lowest wages will have their wages increased by $2/hr on average." The problem is that there is no reason to make this assumption. Barely more than 1% of workers earn the federal minimum wage. There is no evidence to suggest that the number of workers earning close to the minimum wage would bring the total number anywhere near 10%. The CBO report is NOT reliable, it is just the best source we have. While the CBO report does estimate that approximately 10.7% of workers work for less than $10.10 per hour, it fails to account for raises that would have occurred if the minimum wage had not been raised. (The CBO report actually acknowledges this flaw in a note on page 24) This is a very significant flaw to the CBO"s estimates, as TWO THIRDS OF MINIMUM WAGE WORKERS RECEIVE A WAGE WITHIN ONE YEAR. [1] (This is because most minimum wage jobs are learning wage positions)

The subject of poverty rates, that my opponent references are misleading. This is because "poverty" in the United States is defined by an arbitrarily chosen "poverty line", which includes many people who are not very poor. 80% of people below this poverty line have air conditioning. The average "poor" person in the United States has more living space than the average European. Not the average poor European, the AVERAGE European. The point is that there is a large range in wealth among the people described as "poor". [2] Minimum wage laws have the effect of aiding the wealthier (higher skilled) poor, but hurting the truly poor, who have very few marketable skills.

Rebuttals

Breaking the limbs of poor people should not be construed as charitable, even if they happen to receive insurance money as a result of it. Similarly, raising the minimum wage should not be construed as a boon to the poor, even if it results in more welfare benefits for some people. If the goal is to increase welfare payments, welfare should be increased, not the minimum wage.

Conclusion

My opponent greatly exaggerates the benefits, but essentially, he is correct that an increase in the minimum could help the poor. However, this is irrelevant to the question of whether having a minimum wage law in the first place is beneficial to the poor. Due to increases in unemployment and price level, minimum wage laws harm the poor. Small increases are different because when minimum wage laws are in place, they create a malformed labor system.

Thank you, please vote pro.

[1]http://www.heritage.org...
[2] http://townhall.com...
black_squirrel

Con

PRO: It seems to me that my opponent is still confusing the issue. The question of whether an increase in the minimum wage would help the poor is very different from the question of whether or not the poor would be better off if there were no minimum wage in the first place. My opponent appears to be arguing an issue that is not the topic of this debate.

Getting rid of minimum wage laws, is the same as reducing the minimum wage from $7.25/hr to $0/hr. My opponent concedes that an increase in the minimum wage could help the poor when he writes:

PRO: My opponent greatly exaggerates the benefits, but essentially, he is correct that an increase in the minimum could help the poor.

It seems logical that, if an increase of the minimum wage benefits the poor, then a decrease in the minimum wage will harm the poor. This implies that the minimum wage laws that set the minimum wage at $7.25 rather than $0 do NOT harm the poor.

I am not aware of any studies that are done on repealing the minimum wage laws in the USA. And my opponent has not given us any calculations about what would happen if the minimum wage laws were abolished. The best data we have is from the CBO. My opponent agrees with this when he writes:

PRO: The CBO report is NOT reliable, it is just the best source we have.

Even though my opponent thinks that the CBO report is not reliable, it is the most reliable source we have. And the CBO report projects a decrease in the number of people in poverty when the minimum wage is raised.

---

PRO: Aside from this false premise though, my opponent"s numbers are seriously flawed. First, his math is wrong, because he calculates the increase in income before accounting for a decrease in employment. Even using my opponent"s numbers, the total gain should come out to $25 million per hour, not $26 million. (Because 500,000 should be subtracted from 15.5 million before it is multiplied by two. 15.5-.5= 15 15*2=30 30-5=25) Also, the $30 million number does not account for inflation. According to studies I have cited previously, every 10% increase in the minimum wage leads to an approximately 4% increase in price level. Increasing the minimum wage from $7.25 to $10.10 per hour is a $2.85 or 39.3% increase which will lead to a roughly 15.7% increase in price level. This means that the real benefit to poor workers, even using my opponent"s numbers is only $21.075 million per hour.

My opponent is nitpicking here. I wrote "Of course this is just a rough calculation,..." I was just using ball-park figures to make a point: The increase of income for poor family because of the increase of the minimum wage is much larger than the decrease in income from decreased unemployment. The 500,000 people who lose a job earning $10 or less, will still earn at least $2/hr after they lose their job because of government assistance. So going from $10 to $2 is the same as increasing their salary with $2 and then cutting $10.

It is fair enough to include inflation in the calculations. My opponent claims that a 10% increase in the minimum wage will lead to a 4% inflation, and he cites [1] for this. An earlier and free version of [1] is [2]. On page 29 the author writes:
"Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%."
So the overall inflation is 0.4%, not 4%. If we do a rough calculation, we may neglect such a small inflation.

My opponent also got the math wrong. If a 10% increase in minimum wage leads to a 4% inflation, then two increases of 10% will lead to 2 increases of 4% in inflation. So if the minimum wage is multiplied by a factor 1.1^n then the minimum wage is multiplied by 1.04^n. If the minimum wage is increased by 39.3%, then the minimum wage increases by a factor 1.393.
Solving 1.1^n=1.393 yields n=log(1.393)/log(1.1)= 3.4777. Then prices are increased by a factor 1.04^3.4777=1.1461.
This means, that we have a 14.61% inflation, not 15.7% as my opponent claims. But since the inflation is really only 0.4%
if the minimum wage is increased to 10%, the actual inflation after raising the minimum wage to $10.10 is 1.4%.
(1.004^3.4777=1.014).

PRO: But the real problem with my opponent"s argument is not mathematical errors, but that his numbers are wrong. My opponent says "Let's assume that the people with the 10% lowest wages will have their wages increased by $2/hr on average." The problem is that there is no reason to make this assumption. Barely more than 1% of workers earn the federal minimum wage. There is no evidence to suggest that the number of workers earning close to the minimum wage would bring the total number anywhere near 10%. The CBO report is NOT reliable, it is just the best source we have. While the CBO report does estimate that approximately 10.7% of workers work for less than $10.10 per hour, it fails to account for raises that would have occurred if the minimum wage had not been raised. (The CBO report actually acknowledges this flaw in a note on page 24) This is a very significant flaw to the CBO"s estimates, as TWO THIRDS OF MINIMUM WAGE WORKERS RECEIVE A WAGE WITHIN ONE YEAR. [1] (This is because most minimum wage jobs are learning wage positions)

I could not find that note on page 24. But in any case, if the minimum wage would be increased, people earning minimum wage still get wage increases. A person with some experience always will earn slightly more than someone who just entered the job. If the minimum wage is increased, it will also affect the people who earn a wage that is close to the minimum.

Poverty in the USA

PRO: The subject of poverty rates, that my opponent references are misleading. This is because "poverty" in the United States is defined by an arbitrarily chosen "poverty line", which includes many people who are not very poor. 80% of people below this poverty line have air conditioning. The average "poor" person in the United States has more living space than the average European. Not the average poor European, the AVERAGE European. The point is that there is a large range in wealth among the people described as "poor". [2] Minimum wage laws have the effect of aiding the wealthier (higher skilled) poor, but hurting the truly poor, who have very few marketable skills.

Sure, Americans have more living space than in Europe because it is less densely populated than Europe. That does not mean that the Americans with the lowest wages are better of than their European counterparts. More important than space is access to health care. Generally, poor people in Europe have better access to health care than poor people in the USA.
In fact, using absolute measures, there is more poverty in the USA than many western European countries.

Anyway, this is not so relevant for our debate. If we are discussing poor people in the USA, we will go by the commonly used standard of poverty in the USA. I do not think that this is misleading at all. (Obviously, when we are talking about poor people in the USA we do not mean people dying of starvation. However, there are people in the USA with food insecurity though.)



CONCLUSION

A decrease in the minimum wage will have the following effects:
1. wages will go down for poor people (with jobs)
2. the unemployment will decrease for poor people
However, the overall effect is that the total income for poor people will increase on average, because
the increase in employment cannot make up for the loss in wages. In particular, getting rid of minimum wage
(reducing the minimum wage to $0/hr) will HARM the poor.

This conclusion is based on simple calculations, and is confirmed by the CBO report. [3]
As I have shown, more refined calculations will not change this conclusion.
Debate Round No. 4
8 comments have been posted on this debate. Showing 1 through 8 records.
Posted by Taylur 3 years ago
Taylur
OK, just going to mention that I come from a low-income income background. If minimum wage wasn't in place, I would presume that pay would be even less, making poor people even poorer. Minimum wage laws protect the poor.
Posted by Topkek 3 years ago
Topkek
@Hermatite12

The problem with that link you just posted is that is heavily biased, to the extent that it cherry picks tidbits from the CBO report (its sole source) while leaving out other key information (such as the possibility of up to 1 million jobs lost instead of just 500k, that only 19% of the total earnings will go to those in poverty, etc) that would otherwise prove detrimental to their agenda. As well, it posits that there is "net positive economic impact [from] raising the federal minimum wage to the president"s proposed $10.10 per hour," despite this not being mentioned anywhere in the CBO report.

Now on the matter of theoretical economics models, I partly agree with you. A combination of both theoretical models and supporting empirical data is required to adequately prove a point, and not just the former alone. However, most of the more advanced models someone might learn in grad school are both mathematically proven and have been tested in the field, so to say that theory alone could never be enough to explain something is untrue. A good example of a "theoretical" economic model is the Diamond-Mortensen-Pissardes model, which explains how high unemployment may not be directly involved with minimum wage.
http://www.stanford.edu...
Posted by Hematite12 3 years ago
Hematite12
Well to the "herp derp see an ignorant liberal fail at economics" comment, you assented.

So I assumed you also held those black and white dismissive views.

And how exactly would you so soundly "disprove" minimum wage if it wasn't by a theoretical model? The statistics/empirical data is varied and depends greatly on interpretation, and you can't just "explain" to someone why minimum wage doesn't help the working poor if it does depend on so much hard data.

I intended no disrespect to you, but you assented to a stupid and dismissive comment, so I assumed that you were an elitist as well.
Posted by The_Gatherer 3 years ago
The_Gatherer
Snotty economist?

I might well be qualified in economics, but I am certainly not snotty! Quite the opposite actually.

Assuming your comments were aimed at me in reply to my comment, I would point out that I am a down to earth working person, who just happens to be qualified in this area, and also to have experienced and observed the effects of min wage first hand.

Also would point out that I am in UK, and so can only speak properly on min wage in UK and not other countries although I expect the basic issues around this topic are still the same.

I also have to say that I NEVER talk about anything in a theoretical abstract or presumtuous way, in fact I have often been berated for being too much of a realist for some people to handle.
Posted by Hematite12 3 years ago
Hematite12
Forgot to put it in my other comment (lol fail)

Link here:

http://notes.bread.org...
Posted by Hematite12 3 years ago
Hematite12
I see the snotty economists have already gotten to this debate.

I might accept the debate, but I'd probably just be berated by those who think the Chicago School of Economics speaks surer truths than those in Euclid.

Here's a link:

But if you'd prefer to tout theoretical and presumptuous abstract models as better guides than practical cost and benefit analysis, be my guest. But get off your high horse.

You can argue that minimum wage isn't beneficial to the impoverished, but please do it politely, humbly, and with recognition that it's not a black and white issue.
Posted by tyler3923 3 years ago
tyler3923
Yep. Also came to see an ignorant liberal fail at understanding economics...
Posted by The_Gatherer 3 years ago
The_Gatherer
Completely agree.
Although you have no idea how many times I've had to explain to people why.
Look forward to seeing you making the case on this issue.
1 votes has been placed for this debate.
Vote Placed by YYW 2 years ago
YYW
Victorianblack_squirrelTied
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Total points awarded:03 
Reasons for voting decision: PRO's case was comprised almost entirely of obtuse generalizations, bad math and irrelevant evidence. CON's understanding of reducing the minimum wage (having $0.00 replace the current one) isn't especially accurate, because not having a minimum wage only means that there are no laws requiring a certain wage to be paid. However, the whole of PRO's evidence was still insufficient to ground his claim. CON, humorously enough, called out PRO's bad math, and likewise demonstrated that the minimum wage does not, in fact, hurt the poor -even though CON also included arguments that were irrelevant to the resolution.