The Instigator
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The Contender
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0 Points

Minimum Wage in the United States

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Voting Style: Open Point System: 7 Point
Started: 11/28/2011 Category: Economics
Updated: 6 years ago Status: Post Voting Period
Viewed: 2,113 times Debate No: 19536
Debate Rounds (4)
Comments (7)
Votes (2)




I am taking the position that the minimum wage of $7.25 an hour should not exist in the United States, and that any attempt to set a minimum wage by law is economically harmful. Burden of proof is on both opponents to prove that the existing minimum wage laws are beneficial/detrimental. Round 1 is for acceptance or opening arguments. If my opponent chooses to use it for arguments, then under the terms of this debate he/she will not make any arguments at all in Round 4.


1) A) Minimum wage increases productivity of effected work areas via several mechanisms the first being a reduction in employee turnover (this means it reduces how many employees change jobs). This reduction means less time spent hiring and more time working. It also results in less time training new workers. Because fewer employees quit their jobs it means more experienced workers and more experienced workers generally are more productive then less experienced ones.
B) A second mechanism is an increase in the labor supply. A higher minimum wage encourages people not in the labor force to enter it because earnings will be higher; this means employers will have more applicants and therefore better applicants.
C) A third mechanism is an increase in attitude and a feeling that one's job is acutely worth it. Workers who earn more will more likely work harder because they feel that their job provides them with adequate benefits while if they received less pay they would develop a poorer attitude and less feeling of loyalty to their employer.
D) The forth mechanism is an increase in health. Higher wages allow workers to buy more nutritious food, and health care. This means less sick days, and generally a healthier person is able to work harder.

An example of this in the corporate world is Costco vrs Wal-Mart. Costco pays its employees far more than Wal-Mart (generally $10 vrs. minimum wage), however Costco ends up with labor costs that are 1/3 of Wal-Marts; this is because they have lower turnover and because the increased wages results in high productivity.

Also one would expect generally that after minimum wage hikes that productivity would increase by more than before those hikes; the data supports this.

2)Even with the recent minimum wage hikes the adjusted minimum wage is still around 20% lower than its peak; this is despite higher productivity from minimum wage workers and higher education attainment from those workers. The amount of minimum wage workers with a high school degree has increased by around 25%.
This means that despite minimum wage workers contributing more to the economy they are still getting paid less than they used to. This results in a moral dilemma in that if you are against minimum wage laws you are essentially making it so that despite minimum wage workers producing more then will get paid even less.

3)The minimum wage pulls millions of working Americans out of poverty; for example the EITC which is around a 2,000 tax credit keeps 6.6 million people out of poverty. Minimum wage however increases the earnings of a full time worker by 4,000.
One would generally expect to see a drop poverty during minimum wage increases; the data show this.
^(for numbers instead of graphs go to BEA site)

4)A group of economic experts analysis the effect of the recent minimum wage increase on economic conditions, by increasing demand during a weak economy near deflation. They estimate that the minimum wage increase of $0.70 will increased GDP by around 10 billion dollars.

5)The common argument against minimum wage is that it increase in inflation, and is a burden on employers. However I postulate that the productivity increase caused by minimum wage more than offsets this. Evidence supporting my claim is that historically minimum wage increases follow less inflation and less unemployment.
(^click on the unemployment and CPI +PPI indicators to see charts/trends)

Also a study on minimum wage increases in different states shows that small businesses growth was two times higher when minimum wage increases, and does in comparable states with higher minimum wages. Minimum wage increases in states followed in around 30% on average more job growth.

Also another study done by NELP came to the same conclusions which are that minimum wage hikes do not negatively affect the economy.

(I will not be posting int he last round in order to make sure my opponent has the same amount of rounds with arguments as me).
Debate Round No. 1


Thanks for the reply Willoweed. For all my rounds, I’ll be posting sources in the comments section.

I’ll start off by rebutting my opponent’s sourced arguments.

1)My opponent starts by citing a comparison of Costco and Walmart, and concluding that the higher labor productivity of Costco (due to higher employee wages) is grounds to prove that minimum wage is effective. Contrary to what my opponent claimed in his argument ($10 at Costco vs. minimum wage at Walmart), the actual values were $15.97/hr at Costco and $9.64/hr at Walmart. Both values are far above the minimum wage of $5.15 that existed at the time of the article’s writing. Why do I point this out? Because this comparison has nothing to do with minimum wage, since neither group of workers was close to being paid that amount. Since this is a debate about the pros and cons of minimum wage, not higher wages in general, this article doesn’t prove anything about why minimum wage is beneficial.

Furthermore, the wholesale industry is just one business sector. Costco and Walmart are large national corporations with lots of money to spend for employee compensation. Therefore, they can afford to pay wages well above minimum wage. Small businesses, however, get hit hardest by the existence of a minimum wage and subsequent hikes of that wage. Noted economic researcher David Neumark has postulated that a rise in the price of unskilled labor (exactly what minimum wage does) causes business owners to seek out less costly alternatives, such as automation or hiring a lesser quantity of workers with more skill. This leaves massive unemployment of unskilled workers. Collected data supports his hypothesis. A survey of 1,000 restaurant operators showed that over 146,000 jobs were cut from restaurants, and employers also halted plans to hire an additional 106,000 new employees after the last federal wage increases. [1] With the existence of minimum wage, restaurant owners, along with other small businesses, are forced to hire less people. After all, a local restaurant has a much smaller budget for wages than Costco, hence why my opponent’s argument does not translate to most other sectors. The reduced employment leads to a less efficient business, which is understaffed and cannot operate at its maximum potential.

“Also one would expect generally that after minimum wage hikes that productivity would increase by more than before those hikes; the data supports this.”

I don’t see how that data supports your conclusion. If you intend to use the data to prove your point, you’ll need to explain and interpret it. It’s not enough to just give a table with productivity per quarter and conclude that it increased during minimum wage hikes. The table doesn’t even show the time periods of minimum wage increase. I’ll respond to this argument when my opponent explains the data more sufficiently.

2)My opponent cites the fact that minimum wage workers are being compensated less for their work. He goes on to speculate that opposition to minimum wage laws will make it impossible for workers to earn their fair share. Interestingly, there is plenty of economic research to suggest that the minimum wage itself is responsible for the failure to bring many earners out of poverty. For starters, it’s been shown that the minimum wage can be linked to job losses for the unskilled laborers. In addition, a study by economists at Stanford found that 57% of beneficiaries from minimum wage increases are not the earners of the wage themselves, but rather people from higher-income levels. [2] Richard Burkhauser and Joseph Sabia have come to a similar conclusion. They estimated that the proposed minimum wage increase to $7.25 (not in effect at the time of their study) would only provide families at or below the poverty line with 12.7% of the benefits. By contrast, families earning at least twice the poverty line salary would obtain a much higher 63% of the benefits, along with an additional 42% going to families earning three times the poverty line. [3] From this data, it seems that minimum wage laws themselves that are shifting the wealth away from the actual minimum-wage earners. Therefore, the logical conclusion to make is that keeping/continually increasing minimum wage has very little effect on helping its target group out of poverty.

3)Once again, none of the information that my opponent presents is contained in these sources. The EITC page says nothing about minimum wage, and my opponent will need to perform his own analysis on the graphs to show conclusive trends that support his assertions.

4)Sure, the GDP would increase and people would spend more. But as the evidence I presented before displays, most of this spending power would come from people who aren’t even making the minimum wage. Therefore, the increase in GDP would be meaningless for those earning minimum wage and receiving a low share of the benefits from minimum wage increases and mandates.

5)The minimum wage is indeed a burden on employers for a variety of reasons. Think of it this way: for employers, minimum wage (and any associated hikes) are no different than increasing their taxes. If you are an employer who has 10 full time workers on minimum wage, a $0.50 hike in the minimum wage will cost you $10,000 extra for that year in costs. [4] In order to offset this new cost, you might have to cut a couple employees or raise prices on your products. There is the common argument that no minimum wage laws would be unfair to workers. In addition to this being false, evidence shows that minimum wage laws are unfair to small-business employers, since they are left footing the bill of the increases. If an employer were to offer a salary of $1/hour for a job, would anyone REALLY take that job? My guess is no. The law of supply and demand dictates that with no demand for this low-paying job, the employer will have to raise this salary to an acceptable level which will attract prospective employees. Granting employers this freedom gives them the control they deserve over their businesses, and would also lead to an economic “equilibrium” effect in terms of low-wage jobs. When a job that should be worth $4 an hour is mandated to pay $7.25, there’s going to be a huge demand for it. Unfortunately, the employer won’t be able to fill this demand due to budget limitations and an oversupply of applicants for the position.

Finally, in his closing for this round my opponent claims that minimum wage increases promote small business growth and do not actually have a negative effect on factors like unemployment. However, both of his sources for this claim (epinet and thinkprogress) use the now-discredited Card and Krueger study to prove that minimum wage does not have the negative effect on unemployment. Due to sloppy data collection techniques, the results of this study have often been repudiated. David Neumark and William Wascher redid the study with better collection techniques, and found that minimum wage increases were indeed linked to more unemployment, consistent with the accepted economic theory. [2]



Willoweed forfeited this round.
Debate Round No. 2


-_______- yet again, another opponent who closes his account in the middle of debate. I'll extend arguments, and then most likely present a conclusion with a few new contentions since this really isn't a debate anymore.


Willoweed forfeited this round.
Debate Round No. 3


DoctorZhiva90 forfeited this round.


Willoweed forfeited this round.
Debate Round No. 4
7 comments have been posted on this debate. Showing 1 through 7 records.
Posted by abbyhill 4 years ago
Costco's CEO, in a move unlike most retailers, says he would want to see the federal minimum wage increased to $10.10 an hour. That is even higher than the $9 an hour President Obama requested in his State of the Union address.
Posted by abbyhill 4 years ago
Costco's CEO, in a move contrary to most merchants, says he would like to see the federal [url=]minimum wage[/url] elevated to $10.10 an hour. That is even higher than the $9 an hour President Obama called for in his State of the Union address.
Posted by vmpire321 6 years ago
:O It says Willoweed's account is no longer active.
Posted by DoctorZhiva90 6 years ago
Well, I can't edit it anymore, but I do mean in terms of employment. One of my points will contend that the existence of a minimum wage leads to unemployment, while also harming the businesses themselves that have to enforce a minimum wage. Thank you for the help though.
Posted by Defensor-of-Apollo 6 years ago
You should probably define economically harmful. Is it by standard of more employed or by more with sustaining jobs or does it matter? I agree with you, just trying to help you out.
Posted by cameronl35 6 years ago
I want to accept badly but I'm in too many debates right now..
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by WriterSelbe 6 years ago
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Reasons for voting decision: Forfeit.
Vote Placed by 16kadams 6 years ago
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Reasons for voting decision: FF