Round 1- Acceptance
Round 2- Opening Statements
Round 3- Rebuttals
Round 4- Closing Remarks
I accept. Best of luck to CON.
As I understand it, CON will be arguing against the existence of the minimum wage and I will be arguing for it. With a normative resolution, we will bear equal burdens of proof.
The minimum wage hurts jobs and kills small business. To support this claim I like the Monopoly example, it goes like this.
In Monopoly you have the two brown properties at the start, and the two dark blue properties right before go, you of course have some in between, but for the sake of argument we will just use these two properties. If you had to pay your employees in Monopoly, who would be in favour of raising or having the minimum wage in the first place? It would be the dark blue. The dark blue would want this to drive the brown properties out of business. Of course the brown could not afford to pay say $15 every turn, because he is bringing in less revenue.
Some people may not be skilled in an area, say sewing. however if there are two candidates, and one has experience, who will they hire?? Of course the person with the experience. Now if the other applicant really wanted this job he could say, I will work for $6 an hour, the company may think it is worth hiring the cheaper worker. Once the worker gets the skill and experience he can work for more, or what he is worth. Whereas in a minimum wage system, it is very hard to accomplish this because the government has a wage the worker must be paid.
Another thing to remember is that not everyone is worth $10.20 an hour (Alberta minimum wage) So it is not fair a corporation is being forced to pay their workers more than what they are worth.
In order for everyone to be treated the same, we need to have no minimum wage.
Thanks, CON. In this round, I will present my case. I'll rebut CON's in the next round.
The minimum wage is a boon to the U.S. economy because it would increase consumption. Carroll et al., 2013, found that the marginal propensity to consume is far greater for lower- and middle-income households than it is for high income households (1). In reference to raising the minimum wage to $10,10, the CBO finds that "[t]he increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO"s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates" (2). Wage pressures would build not only for minimum wage workers, but for many more workers, all of whom are likely to consume with those dollars, thus stimulating economic activity. Aaronson and French found that an increase to $9 an hour would boost real G.D.P. by .3 percentage points and boosts household spending by $48 billion (3). Further, Aaronson et al, 2011, found that a MW causes “household income rises on average by about $250 per quarter and spending by roughly $700 per quarter for households with minimum wage workers” (4).
II. Efficiency Wage Hypothesis
The efficiency wage hypothesis "states that workers' productivities depend positively on their wages" (5). A literature review by Wolfers and Zilinsky, 2015 (6) finds a myriad of real-world evidence for this theory that higher wages tend to induce workers to work harder, which benefits businesses, who are able to produce more and thus sell more.
Yellen, 1984, found that higher wages led to "reduced shirking by employees due to a higher cost of job loss; lower turnover; an improvement in the average quality of job applicants and improved morale" (7). Holzer, 1990, arrived at a similar conclusion: "high-wage firms can sometimes offset more than half of their higher wage costs through improved productivity and lower hiring and turnover cost" (8). There's evidence that workers with less income security also have poorer on-job performance. The World Bank's 2015 Development Report found "The constant, day-to-day hard choices associated with poverty in effect tax an individual"s bandwidth, or mental resources. This cognitive tax, in turn, can lead to economic decisions that perpetuate poverty" (9).
Higher wages also increase labor supply, attracting better and more productive workers. Rossi et al., 2013, found that "offering higher wages attracts individuals with higher previous earnings, and who have both higher IQ and more desirable personality traits, as measured by the Big 5 personality and public service motivation tests" (10).
Higher wages also reduce labor turnover, reducing the cost of training and hiring new workers and thus saving businesses money. Reich et al., 2003, in a study of the San Francisco airport, found that higher wages reduced labor turnover by 34%, thus saving the airport $6.6 million per year (11). Reich et al., 2007, found that a San Francisco wage floor policy reduced labor turnover from 95% in the mid-2000s to 18.7%--a 763 basis point decline (12).
Fisher et al., 2006, used data from 500 retailers to find that higher wages improve customer service and customer satisfaction (13). Capelli and Chauvin, 1991, found that higher wages improved employee discipline (14). Zhang et al., 2013, found that in Canadian firms higher wages resulted in reduced employee absenteeism (15). Finally, Georgiadis, 2008, find that, because higher-wage workers tend to require less supervision than low-skilled workers, "higher wage costs were more than offset by lower monitoring costs" (16).
Therefore, there a myriad of ways that raising the minimum wage would actually save businesses money through greater efficiency, offsetting cost increases.
III. Income Inequality
The U.S. is plagued with the worst income inequality since 1928 (17), and research by Saez, 2013, shows that it has been increasing steadily since the 1970s (18). This coincided with widespread deregulation and tax cuts under Ronald Reagan and his attacks on labor unions (19), and a nearly doubling of productivity over the past thirty years, but flat wages for most workers, adjusted for inflation (20), and falling real wages for minimum wage workers, whose wages aren't adjusted for inflation (21). For instance, the minimum wage from 1979 to 2012 fell 21 percent (22). This is undesirable not only on a moral basis because people are paid not what they're due or what their skill set lends itself to, but because these people are placed on a lower rung of the economic ladder as their starting place, based on characteristics outside of their own control--e.g., their family's socioeconomic status--and thus are denied equality of opportunity. This is especially true because income inequality is self-reinforcing. Children born into poor families disportionately likely to stay poor. Greenstone et al., 2013, find that poor children in the lowest income quintile are more than ten times more likely to stay there than they are to reach the highest quintile as an adult (23).
Nobel Laureate Joe Stiglitz adds the following:
"There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth...Second, the hollowing out of the middle class since the 1970s, in a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses..Third, the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks...Fourth, inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable" (24).
Now, how does the minimum wage tie to this? Simple: it's contributed to the widening disparity in income distribution which dates by to the 1970s because it's declined in real terms. Autor et al., 2014, estimate that 30 to 50% of the growth in income inequality from 1979 to 1989 can be attributed to the falling real value of the minimum wage, and they note a still significant contribution from 1979 to 2012 (25). Note that the authors admit that these estimates are conservative, and there"s a body of literature attributing as much as 85% to 110% of the rise in inequality to the falling real value of the minimum wage.
Mishel, 2013, adds:
“A higher minimum wage wouldf help address growing inequality, particularly as it affects lower-wage women...For workers overall more than half (57.0 percent) of the increase in the 50/50 wage gap [between median-wage workers and workers at the 10th percentile in wages] from 1979 to 2009 was accounted for by the erosion of the minimum wage” (26).
IV. The MW does not kill jobs
A canard that my adversary will raise is that MW results in layoffs. Obviously that falls short in light of the evidence I presented earlier in this round, but the claim is without strong empirical backing. In fact, John Schmitt, 2013, conducted a literature review and found that the minimum wage has "no discernible effect on employment" (27). Much of this is because, per Krugman, minimum wage jobs exist in industries which are non-exportable (28). Let's explore some of the relevant literature.
Card and Krueger, 1994, looked at the 1992 rise in New Jersey’s minimum wage and found no evidence of negative employment effects (29). In fact, they found, after comparing evidence from stores in eastern Pennsylvania where the MW remained constant or to stores that were already paying near wages near the MW, that the minimum wage actually worked to increase employment. Dube et al., 2010, replicated the findings of Car and Krueger and found no negative employment effects after adjusting for spatial heterogeneity (30). Next, a meta-analysis by Doucouliagos and T. D. Stanley, 2009, looked at 64 minimum wage studies from 1972 to 2007, and found that, after adjusting for public selection bias, that the evidence is clear that the minimum wage has no effect on employment (31). Belman and Wolfson conducted a similar meta study on literature revealed since 2000 and, using 27 studies, found no statistically significant negative employment effects (32).
Now, how far could we go? Michael Reich, economist at U.C. Berkeley, finds that, “Our data show that an increase up to $13 an hour has no measurable effect on employment" (33). Of note is that we don't know the extent to which we could actually raise this wage because the existing literature is limited to current wage increases, though it goes without saying that some level would have deleterious impacts. This resolution, however, only forces for me to argue that some MW ought to exist, so that there exists some level at which we wouldn't incur these negative employment effects affirms this resolution.
Starting with your poverty argument, if we want to alleviate poverty, why not make the minimum wage $50 or $100 dollars?? Most people will say no because that will kill jobs, thus leading into pros argument that the minimum wage does not kill jobs, the logic stands that even raising the wage by 1 dollar will increase unemployment.
"A higher minimum wage would help address growing inequality, particularly as it affects lower-wage women..."
In this pro is making the assumption that women have the exact same skills as men, they do not. If two people were applying to a job, say to a roofing job. (Men make up 98.9% of the workers). I am not saying women can not be skilled in this area, however she needs to gain experience. So lets say a man and a women were applying to the same job at a roofing company, most likely who would the company hire? (This is assuming neither have experience). It is most likely that the male would be hired, however what if the female said I will work for 2 dollars less. This increases her chance of getting hired much greater. Now if they still hired the male, I can almost guarantee she could find another job if she worked for less. Of course when she gets experience she can work her way up the ladder at her job.
In regards to pro saying it increases income inequality, we see it with a minimum wage as well. In fact with no minimum wage this gap would be gone, mainly because if a employer is not paying what you are worth, you will go to a company willing to pay you more, thus increasing competition. Take for example Wal-Mart, the average cashier is paid $9.09 per hour USD. Now I can guarantee the higher up employees are paid much more than that, as the links below show, the higher up management are paid much more than the workers, creating a large gap. However without minimum wage Wal-Mart would have other competition willing to pay more. Lessening the income inequality gap.
"Supporters hail the minimum wage as a victory for "fairness" and a benefit for poor people. This, it is alleged, will provide more income to support spending and stimulate the economy. If it works that well, why not make the minimum $50? This would provide someone working 2,000 hours a year an income of $100,000, eliminating poverty and stimulating the economy. Obviously, $50/hour would be detrimental to employment as is $7/hour, it"s just a matter of degree."
This ties into pros consumption argument, stating that minimum wage helps the GDP, it would help if the jobs would pot be lost.
Congress raised the minimum wage 10.6% in July, 2009. In only 6 months, nearly 600,000 teen jobs disappeared, even with nearly 4% growth in the economy, this compared to a loss of 250,000 jobs in the first half of the year as GDP growth declined by 4% Why? When you raise the price of anything, people take less of it, including labor. The unemployment rate for teens remains unacceptably high. About 60% of the officially poor don"t work, so the only thing raising the minimum wage does for them is to make it harder for them to get a job if they ever decide they want one.
Consider a community based pizza parlor selling 100 pies a day for 360 days at $10 each. Total revenue is $360,000. It employs 10 minimum wage workers earning $7 per hour, working 2000 hours a year, making labor costs $140,000. Assume rent, utilities, equipment, depreciation, insurance, supplies, licenses, and food costs come to $170,000 per year, leaving a profit of $50,000 for the owner and his/her family. Raising the minimum wage $1 would raise labor costs by $20,000 (paying more for the same amount of labor) and reduce profit to $30,000. The owner must either move into a smaller house or raise prices, which reduces the demand for pizza, resulting in the loss of a worker. So, the full increase in the wage cost of an increase in the minimum wage comes out of the pockets of customers or the owner"s family, and the one person who loses a job. There was no net gain in income to increase spending in the community served as every dollar the minimum wage workers received came out of someone else"s pocket in the community.
Another problem with minimum wage is it takes down the initiative to work hard and get ahead, why would I work twice as hard as my fellow employees when I make the same?
I am excited to hear back from pro!
CON asserts that the MW hurts jobs and kills small businesses. This is untrue, and I've provided plenty of evidence, including several meta-analyses such as Doucouliagos and T.D. Stanley (2009), Card and Krueger (1994), and Belam and Wolfson (2014). All of these find that the MW *does not* negatively impact employment. CON has nothing to balance against these, so there's no tangible impact of his arguments. Thus, you're voting PRO on employment.
Next, his analogy is highly flawed and makes several assumptions. An anecdote cannot possibly supplant assumptions, and that he is attempting to opine on behavioral psychology without substantiation is enough to toss out the contention. The goal of the Monopoly game, of course, is to quite literally drive people out of business: an example of rent-seeking (1)(2), i.e., a business using its resources in an effort to earn a benefit without recepricating. In the process, players are actually able to, on a whim, subsume as much market power as they want via purchasing land, but CON cannot rightly use this board game as a microcosm for the real world. Firstly, he doesn't actually prove that this anecdote has any real bearing on real-world business behavior, which would require evidence from behavioral economics. Secondly, he doesn't acknowledge that companies that employ MW workers are in deep competition for customers - which is why, in many cases, any of the prices increases that might result are extremely small, as research by Sara Lemos shows (3) - and that actively engaging in rent-seeking via political lobbying would significantly damage their reputation, and thus their customer base may flee. Thirdly, this analysis presumes that the MW actually hurts employment. Beause I've provided plenty of evidence that it does not, you can toss this contention out. Fourthly, he not only pulls $15 out of the sky - i.e., the resolution concerns *some* MW, not a certain MW - but he fails to acknowledge that this would apply to *all* companies, not just some. In other words, even if businesses actively tried to raise the MW to hurt their competitors, they too would bear the same burden. If the MW is actually harmful as CON contends, this would be a counter-productive measure. Fifthly, lobbying for political influnce is only possible if there's a genuine chance of politicians passing favorable legislation. However, the U.S. Congress has been deadlocked for years, and thus even if CON's other assumptions held - and they don't - this example isn't realistic.
CON contends that, because of skill disparities amongst workers, the "cheaper" worker may be able to clinch a job by offering his labor at a lower wage. However, there are several problems with this example. First, skill set and productivity are variable. For instance, if I am a business owner I can boost your productivity by enrolling you in a class or purchasing better machinery for you to use, and I can hinder your productivity by depriving you of lunch breaks. That there's this tangible amount that people are "worth" is false, and is belied by my evidence showing that, as productivity over the past three decades has nearly doubled, wages did not grow in tandem, but in fact stagnated and real terms and fell for MW workers. If the MW grew with productivity sinc 1968, it would have been $21.72 in 2012, not $7.25, which is even below what it would be if it were inflation-adjusted (4). In fact, if it grew at the same pace as pay of the 1 percent, it would be $33.14 (5). That pay has increased so substantially for the top 1 percnt of earners, but not MW workers, demonstrates Karl Marx's notion of surplus value - that to earn a wage of Y, you must have a productivity of X + Y, in which case the remaining X is the surplus profit that employers subsume for their employees (6). (In other words, people are *not* treated the same because of the declining real value of the MW). In that sense, then, the MW is merely adjusting for deferentials in bargaining power. Finally, CON's analogy is flawed if we cross-apply my evidence on the efficiency wage hypothesis, whereby paying workers higher wages actually boosts their productivity, reduces turnover, improves discipline, etc., in which case ex-ante skills become less of a consideration in hiring decisions. In fact, even if that worker was less skilled, he could simply find employment elsewhere, as a booming economy encouraged by a MW increase would allow. The only case where that isn't possible is if he's structurally unemployed, but that point is non-unique: the MW can do nothing about structural unemployment, nor did it create it, though federal jobs-training programs alongside a MW increase would mollify that harm. Tolerating starvation wages amid assymetries in bargaining leverage cannot conceivably be a solution to stagnating wages and massive income disparities, which gives rise to all the harms I highlighted in my last round. We need to look at the impact of the MW in the aggregate, not in terms of some isolated anecdote.
Defending My Case
In my round, I provided three studies showing that the MW actually boosts consumption, and PRO didn't dispute my evidence or balance anything against it, so you have to buy that the MW would boost consumption. His only rsponse is that the MW would boost GDP if jobs aren't lost, but (1) I've already provided several reputable studies showing that moderate MW increases do not induce layoffs and (2) even if there were moderate layoffs, this need not mean that the MW doesn't boost consumption. Rather, because low-wage workers are more likely to spend the increase in their pay check and even laid-off workers, if such workers exist, would receive payments via automatic stabilizers from the government, consumption would still rise.
II. Efficiency Wage Hypothesis
This contention was dropped, so you can extend it. The impact of this was devastating for CON, because I demonstrated that businesses could recover virtually all of the costs of raising the MW through greater efficiency, such as reduced turnover, improved morale, improved discipline, higher productivity, etc. in fact, this along with very slight price increases is how businesses weather th slight increase in costs of the MW, so this goes handily with my evidence on it not harming employment. If this is dropped by next round, it's impactful enough to simply vote PRO on this.
III. Income Inequality
CON's response to this contention is completely disjointed. First, he drops that wages have been stagnating for most workers and falling for MW workers; that inequality begets inequality and that social mobility is low; that much of this can be attributed, via Autor et al., to the declining real value of the MW; that inequality as tangible harms, as delineatd by Joe Stiglitz; and, per Mishel (2013), the MW would actually reduce this inequality. Thus, you have to buy all of these impacts.
CON then strawmans my evidence. I *never* postulated that men and women have the same skills, but rather that increasing minimum pay *in the aggregate*, not with respect to one particular industry. While CON's evidence on men being by their nature more skilled than women in X industry is anecdotal by itself, my evidence speaks to the *aggregate.* In other words, because all industries would need to offer a certain minimum pay - and many of these workers are in fact women - pay would rise. CON never challenges this. Also, cross-apply my earlier response in skills disparities.
CON's argument that inequality exists with the MW ignores the *reason* for this, much of which is the *declining* value of the MW. In other words, the MW itself would ameliorate this inequality. Workers have the aiblity to work elsewhere currently, but even *with* this labor mobility - over three decades, no less - CON concedes to this gap. He never demonstrates how eliminating the MW would actually improve competition. In fact, as I demonstrated, eliminating it would *reduce* the willingness to work, and thus reduce the aggregate productivity of the workers employed. Many workers would rely on the government doll in lieu of earning their own living - cross apply the evidence from my povery contention. We had no minimum wage prior to the 1930s, and we saw, as expected, poverty-level wages far worse than we're seeing now.
CON doesn't contest a single study I presented, nor does he present any of his own, so already you're preferring my evidence. The main problem with this remark, though, is that it presents a correlation as causation. He fails to tell you that the U.S. economy was reeling from the most severe recession since the Depression during this time, and that *that* was the cause of jobs disappearing, not the increase in the MW. His claim on 60% of the poor not working is unsourced, but also absurd because the MW would actually *induce* people to work more, and thus decrease welfare spending. Because that evidence from my R1 was dropped, extend it. Then CON provides us with nothing more than an anecdote with fake numbers, but ignoes *all* of the evidence in my second contention demonstrating how these labor costs are offset. Thus, discard it. His contention on the MW removing the initiative to work is also unsubstantited and nonsensical, by its nature. Increasing compensation would actually *shift out* labor supply and increase the incentive to work. For that, you need only look at my C2.
CON's only response to this contention is a reductio ad absurdum, but this is nonsense: a $50 or $100 MW would be absurd, and I am not obligated to defend it. He can in no way tie this to the resolution except with his unsubstantiated non-sequitur that, somehow, because an absurd value of the MW would be harmful, even a $1 increase would have negative effects. He provides no evidence for this, but I provide evidence to the contrary. Thus, buy my evidence.
Hunts forfeited this round.
It’s disappointing that CON has forfeited. I’m going to offer a brief summary of this debate and explain why I’ve won.
The Resolution and Burdens
The resolution required that I defend the existence of the MW, not some particular value of the MW, while CON was required to argue that the MW ought not exist. The two of us bore equal burdens due to this being a normative resolution, and thus you evaluate this based on weighing impacts.
Con’s case provided not a single impact. His monopoly analogy, which described rent-seeking, was highly flawed and not reflective of the real world, as I noted at length in the last round. His entire case featured unsubstantiated assertions that I’ve already thoroughly refuted, such as his claim that the MW kills jobs. He offers not a single study bearing this out, whereas I have offered four studies and a literature review demonstrating otherwise. I explained why we must examine the MW in the aggregate, rather through the lens of an individual worker, and why on balance having a MW would be beneficial because it would create opportunities for low-wage workers and enhance productivity and efficiencies for businesses.
CON actually never challenges in depth whether the MW would boost consumption, but merely postulates that the possibility of job losses may damper this effect. I generally agree that if the MW cost jobs, it would cost consumption. However, because I’ve demonstrated at length that the MW, at least in modest amounts, does not cost jobs, as even these three studies finding substantial consumption effects also substantiate, I’ve won not only on employment, but on consumption – and, as I also noted in the last round, it is conceivably possible to incur some job losses and still boost consumption, though obviously that isn’t the case we’re dealing with.
Impact: I provided several numbers in this round, all of which were dropped, and thus conceded:
-$31 billion in new income from an increase in the MW to $10.10 (CBO)
-$48 billion in new spending and a .3 percentage-point increase to real GDP from an increase in the MW to $9 (Aaronson and French)
-Incomes would rise on average $250 per quarter and spending would rise by $700 per quarter (Aaronson et al.)
Every single one of these points, alone, is enough to win for me to win this debate.
II. Efficiency Wage Hypothesis
In this contention, I argued, and provided a plethora of evidence, for the fact that higher wages produce a myriad of efficiencies for employers, such as boosting productivity, improving morale and employee discipline, reducing turnover, and more. I’d like to direct your attention to two of the studies I raised in this round: Holzer (1990) and Georgiadis (2008). The former found that firms could offset more than half of the cost of higher wages through productivity gains, lower turnover cost, and lower hiring costs. The latter found that firms can more than offset the cost of higher wages through lowering monitoring costs alone. Note that this entire contention was dropped, and thus you must extend it.
Impact: CON’s assertion that higher labor costs would have adverse effects on business and thus reduce employment is simply not borne out by the facts, and this contention provides a tangible explanation, backed by real-world data, as to why this may be the case. This contention alone, once more, is impactful enough to affirm.
III. Income Inequality
Almost everything from this contention were dropped, and thus you need to buy these harms. CON concedes that income inequality exists and even that it’s a problem, but he postulated that eliminating the MW would actually solve this because it would “increase competition for labor.” First of all, labor mobility is by itself imperfect, nor is bargaining power perfectly symmetric, so by all accounts even the ability to switch jobs would nevertheless depress wages as part and parcel of a three-decade long secular trend. Second, he doesn’t tell you that one of the main reasons that inequality is so bad today – and Autor et al. from MIT, which I cited in Round 2, demonstrates this – is because the MW is not indexed to inflation, and thus it’s been falling in real terms since its peak in 1968. The falling MW, it bears reiterating, contributing to inequality, which leads us the logical conclusion that eliminating said minimum standard and allowing wages to fall further would only exacerbate inequality by allowing wags to fall even further. We would see inequality on par with the pre-New Deal era which is far worse than it even is today, and we know from three decades worth of data that a MW is necessary to correct for assymetries of bargaining power.
Impact: The impact from this contention comes in several ways. First, take my Autor et al. evidence demonstrating that the decline in the real value of the MW has in fact increased inequality. Then take my Stiglitz evidence as to the tangible harms of inequality: reduced consumption, lower tax receipts, lower investment in education and innovation, and a more volatile boom-bust cycle. Then take the evidence from Autor et al. and Mishel showing that increasing the MW would actually reduce these harms, whereas eliminating it would only exacerbate them. CON has, as expected, nothing to balance against this.
I’ve already discussed this at length, so there isn’t much worth repeating. Even if there were moderate job losses, they would be so modest – and, for that matter, offset by monetary policy – that you would weigh reducing income inequality over them. However, I’ve provided several empirical studies showing that this is not the case. CON’s only “evidence” on this is an article from Forbes, which is not only biased because it’s an opinion piece from an entrepreneur, but simply disingenuous in asserting that the MW actually reduces employment. It takes one isolated increase amid the worst financial crisis since the Depression and asserts a causation where there isn’t one, and it even has to go forward two years, since the MW increase was passed in 2007, in a feeble attempt to separate it from the impact of the recession, though that simply isn’t the case. I also don’t know where the 4 percent figure came from. Here’s RGDP data from the St Louis Federal Reserve site:
The series we want to look at is “continuously compounded annual rate of change,” or in other words taking a quarterly GDP growth rate and annualizing it via multiplying by 4, assuming that growth rate is constant for the remainder of the year. For 2009, we get the following numbers:
In other words, the 4% figure was also wrong. That applied to a single quarter, not to the entire year. The GDP growth rate for 2009, taken as an average of these quarterly annualized growth rates, was actually -0.24% (in other words, a contraction). CON’s source cherry-picked Q4 in a feeble attempt to say that the economy was growing but employment wasn’t. That wasn’t the case, but even if it were the case, it’s true that employment tends to lag GDP due to various behavioral and contractual issues businesses face, but not this contraction in 2009 (and, before you ask, I know for a fact that the 4% wasn’t nominal, because the U.S. was actually experienced DEFLATION via the headline PCE index, so nominal GDP was even lower). In other words, this disingenuous author is trying to attribute a decline in employment caused by the financial crisis to a MW policy passed two years prior, irrespective of the evidence which attempts to isolate the impact of that policy and which finds no negative impact. In other words, blame the subprime mortgages, not the fast-food workers trying to sustain themselves.
Impact: I provided several studies showing that, at worst, the MW has no net effect on employment and, at best, it boosts employment via boosting consumption and productivity. CON has nothing to balance against it. This, once more, is reason enough to affirm.
There were several impacts in my case, all of which CON ignored. First, the CBO study found that raising the MW to $10.10 would lift 900,000 people from poverty, and Dube found that a modest increase would lift 4.6 million people from poverty immediately and 6.8 million people from poverty over time. This is a huge impact, because it means the at these people would be less dependent on the government for social services, which would reduce the budget deficit and free up funds to be spent elsewhere. The study from Algretto et al. out of Berkeley found that, merely on fast-food works, the government would save $7 billion in money it otherwise would have spent effectively subsidizing corporate giants, like Walmart, who are holding down wages for the sake of consuming each worker’s surplus value.
CON’s only argument for this involved a reduction ad absurdum and a non sequitur fallacy. The first was the absurd suggestion that we increase the MW to $50 or $100. This is notably absurd, as I even acknowledged in my first round, and I don’t need to defend it. But acknowledging that something may be true of something when you take it to absurd, unrealistic extremes is not the same as proving that to be true for a base case. In other words, it does not follow that because a $100 MW would be deleterious to employment, that a $1 increase would also harm employment. I’ve, again, provided you plenty of evidence that that the latter would not harm employment, whereas all CON has done is loosely related pieces, broken links, and a disingenuous opinion piece from Forbes.
Impact: Millions of people would be lifted from poverty and spending by the government on stabilizers would fall appreciably, thus freeing up funds to be spent elsewhere. CON has nothing to balance against this, so once more you can affirm simply based on this.
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