The Instigator
LaissezFaire
Con (against)
Winning
5 Points
The Contender
Guardian
Pro (for)
Losing
0 Points

Minimum Wage

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
LaissezFaire
Voting Style: Open Point System: 7 Point
Started: 8/6/2010 Category: Politics
Updated: 6 years ago Status: Post Voting Period
Viewed: 1,837 times Debate No: 12706
Debate Rounds (4)
Comments (0)
Votes (1)

 

LaissezFaire

Con

My position is that all federal and state minimum wage laws in the United States should be abolished.

Definition:
minimum wage law- A law mandating a minimum per hour wage for all employees.

Positions and any definitions will be clarified in the 1st round, and the next 3 will be used for the actual debate.
Guardian

Pro

My position is that, in our current state, we need to keep both federal and state minimum wage laws. I'm looking forwards to another great debate
Debate Round No. 1
LaissezFaire

Con

Young, unskilled workers:
These are the people most hurt by the minimum wage. This seems unintuitive, because aren't these the people who would make less than the current minimum wage if it were abolished? Wouldn't a minimum wage force those evil businessmen to pay them a higher wage? Unfortunately, that isn't how it works. Every worker provides a certain amount of marginal utility to a business. Say an unskilled laborer's work provides $4.50/hour of revenue to their employer. If there's a minimum wage above that amount, the worker won't be hired, because hiring that worker would result in a net loss for the employer. This is devastating to a young worker's ability to improve their lives. Economists have shown that a 10% increase in the minimum wage results in a .2% increase in unemployment, the vast majority of those unemployed being youths. [1] The minimum wage laws supposedly designed to help the poor trap them in poverty.

Because it is so hard for unskilled youth to get jobs, they don't get work experience. In addition to denying these people work experience, a minimum wage makes the work experience these workers won't get even more important to employers. If an employer wanted to hire an unskilled, unexperienced worker, they would have to train him. Since the employee isn't being productive during the training period, it makes sense for the employer to pay them a very low wage at first, then a higher wage once the employee is trained. But because of minimum wage laws, businesses don't do that. [2] Since they have to pay the minimum wage anyway, it makes sense for them to hire someone who already has experience, so they don't have to waste time and money training them. The long-term effects of minimum wage laws on these people are lower degrees of educational achievement, higher rates of long-term unemployment, and much lower lifetime earnings [2]

So what happens to these unemployed workers then? Many become dependent on their parents, or welfare. Others turn to gangs. Because selling drugs is illegal anyway, gangs don't adhere to minimum wage laws, and pay low-level employees several dollars an hour below the current minimum wage. So, because of minimum wage laws, unskilled youth are driven to work for low wages in extremely dangerous conditions.

Ex-Cons:
One benefit of abolishing the minimum wage would be to help ex-convicts turn their lives around. Say there are two applicants for a job opening. One just got out of prison, we'll call him Carl. Carl used to be a drug addict, but got clean and is trying to turn his life around. The other, let's call him Michael, is a teenager from the suburbs with a perfect resume and good references. The job opening is for low-skilled, entry level job, and pays minimum wage. Who is the employer going to hire? Obviously, he'd hire Michael. Carl, as an ex-con, is more of a risk, and since he'd have to pay them the same wage, the logical choice is to hire Michael. Because of the risks of hiring an ex-con, Carl is never able to get a job, and thus never able to turn his life around. But what if there weren't a minimum wage? An employer would certainly prefer to hire Michael over Carl if he had to pay them the same wages, but what if Carl was willing to work for a few dollars and hour less than Michael? Carl could get his first job, and, once he's shown that he's a reliable worker, move his way up in society.

Who Benefits From the Minimum Wage?
Unions are usually the strongest proponents of minimum wage increases. At first glance, this seems to makes sense—working class people showing solidarity with other working class people. But what about labor union leaders lobbying and bribing representatives with donations for minimum wage increases? Unionized employees don't work for minimum wage, or even close to it. Labor union leaders never care about, much less lobby and spend money for, anyone but their union members in any other situation, why would they do so for this issue? The answer is that minimum wage laws benefit unions of skilled workers at the expense of un-unionized unskilled workers.

For a given task, businesses often have the choice between hiring a bunch of unskilled workers to do a task or buying machines and a few skilled workers to use them. Businesses will always choose the choice that costs less, which in a free market, would usually be the unskilled workers. But that's in a free market; minimum wage laws change things. A minimum wage law raises the cost of the unskilled workers option, meaning that more businesses will hire skilled, and therefore often unionized, workers instead. This means more jobs and higher wages for union workers, which is why union organizers support increases in the minimum wage.

Sources:
[1] Hicks, Michael J. "Who Lost Jobs When the Minimum Wage Rose?" Center for Business and Economic Research.

[2] Neumark, David and Wascher, William. "Minimum Wages, Labor Market Institutions and Youth Employment: A Cross-National Analysis." Federal Reserve Bank.
Guardian

Pro

LaissezFaire, In the process of researching for this debate, I have changed my mind on many accounts. My main argument was going to be that because of inflation, we need something to continually keep workers up to date on their wages. Here's the problem with that; increases in minimum wage help increase inflation. The market would also adjust itself to inflation because, as workers became more experienced, businesses would compete for the more skilled workers and in order to draw them in, pay them more. On top of all this, inflation isn't such a big deal to the vast majority of minimum wage employees because they are kids, living with mom and dad just trying to get some work experience. Minimum wage doesn't do much to help against inflation for a family because it's so far below the poverty line. My only concern about not having a minimum wage would be this. Let's use Ben and James as examples. Ben lives in the country 30 mins out of town. James lives in town only minutes away from shopping and restaurants. James and Ben both apply for the same position. They both have no work experience. James however, decides to offer to work for a very low amount to get the job. After all, he can ride his bike or even walk to work. Ben however, must pay for gas in order to get to work. He cannot go any lower on his wages. Ben now cannot find work because everyone who lives in the city is working for lower than he can. If there is no minimum wage, what happens to the Ben's of the world?
Debate Round No. 2
LaissezFaire

Con

That particular situation is irrelevant. One, while abolishing the minimum wage may hurt a few people, it would benefit far more. Two, the government has no right to infringe on a worker's right to take an available job. If an employer is willing to offer someone a certain amount of money for their labor, and the worker is willing to offer their labor for that amount of money, what right does anyone have to stop them? The government should never stop peaceful agreements between consenting adults.
Guardian

Pro

While I don't want to forfeit on you, my mind has been changed. I'm sure that someone else could make a more prolonged argument over this, minimum wage no longer makes sense to me. Sorry that you didn't get the challenging debate you were looking for on this subject.
Debate Round No. 3
LaissezFaire

Con

That's alright. If you ever want to debate something else in the future, I'd love to, just send me a challenge.
Guardian

Pro

Guardian forfeited this round.
Debate Round No. 4
No comments have been posted on this debate.
1 votes has been placed for this debate.
Vote Placed by LaissezFaire 6 years ago
LaissezFaire
LaissezFaireGuardianTied
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Total points awarded:50