The Instigator
ThePraetorian
Con (against)
The Contender
McMount
Pro (for)

Minimum Wage

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Voting Style: Open Point System: 7 Point
Started: 7/7/2016 Category: Economics
Updated: 4 months ago Status: Debating Period
Viewed: 241 times Debate No: 93440
Debate Rounds (5)
Comments (3)
Votes (0)

 

ThePraetorian

Con

I argue that minimum wages pose a definite trade-off between wage gains for some and unemployment for others.
McMount

Pro

I accept and assume the opening arguements start on the second round.
Debate Round No. 1
ThePraetorian

Con

Yes good, ok so my argument here is that the minimum wage causes unemployment for the low skilled because it forces a wage rate above that of labors marginal output. If a worker contributes, say 7 dollars to output, and the boss pays him 5 dollars, the boss obviously profits 2 dollars. But if a minimum wage is enforced, say 10 dollars, the boss is in the hole. The only solution is to lay off those employees and cut marginal costs elsewhere. Also, as a simple function of supply and demand, increasing the price for a factor like labor will decrease its demand, while increasing the supply, since it incentivizes more people to work because they can make more money. The increased supply will incentivize employers to only keep the more productive of their labor force, meaning more less skilled labor is left behind. This is called labor-labor substitution by economists, and a study by David Farris and Leon Fernandez from the university of claifornia found that "the intended wage gain for workers is dissipated by roughly 40% through labor-labor substitution." Employment data also points to disemployment effects. Nuermark found teen employment elasticities of -0.3%, which is quite significant. There exist several flaws in pro minimum wage studies but we can get to that in later rounds.
McMount

Pro

Allright. Rising the minimum wage to, say, 10 dollars, will obviously rise the price of the product. However, as this higher minimum wage is universal, it will also increase the demand of products as more wealth is allocated to those working on minimum wage. According to U.S. Bureau of Labor Statistics, in 2014 77.6 million workers (58% of workforce) were paid with hourly rates, of which a total of 3 million were paid the minimum wage of 7,25$ -or less. They make up for a total of 3,9 % of all hourly paid employees.
Rising the minimum wage will rise the overall demand of products quite significantly. In the long run this will lead to inflation, but nevertheless it allocates more wealth to those who are "poor". In this sense it also lessens the gap between social classes.
As overall product demand rises, the supply must increase as well. Companies must hire more employees and invest money in developement. All this serves to grow the economy.
Debate Round No. 2
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Debate Round No. 3
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Debate Round No. 4
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Debate Round No. 5
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by migmag 4 months ago
migmag
$15/hour is what Bernie Sanders has proposed. $12/hour is what Hillary Clinton has suggested. Most Democrats in the US House and US Senate have proposed $10.10/hour. Republicans either want the minimum wage lowered or abolished, both are crazy and insensitve
Posted by ThePraetorian 5 months ago
ThePraetorian
@lord_megatron any minimum wage, but 15 is the one most put forward by advocates.
Posted by lord_megatron 5 months ago
lord_megatron
Define your minimum wage
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