Raise The Minimum Wage
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|Voting Style:||Open||Point System:||7 Point|
|Updated:||9 months ago||Status:||Debating Period|
|Viewed:||510 times||Debate No:||94225|
Debate Rounds (3)
I believe the minimum wage should be raised on a federal level.
Con will argue the opposite.
I accept this debate, and will allow Pro to state his arguments first. Good luck!
Alright, so I am going to go through the reasons I believe increasing minimum wage would be beneficial to society.
1. As productivity has climbed marginal compensation has rise very slowly with it.
As we can see from this graph, in the past few decades we have increased our production capacity by a stunning amount yet hourly compensation has risen very slowly with it and has even stagnated and decreased. Meanwhile, CEO pay has greatly increased only dropping significantly during the 08 crash
If productivity increased by this much you would think not only the ceo, but the average worker's pay would go up by similar margins but that is not evident. A rise in minimum wage would help this gap close.
2. Increased aggregate purchasing power
With an increase in minimum wage those living on minimum wage would have the ability to purchase more.
As we can see from this graph, the average purchasing power has gone down significantly and while that has happened we have been unable to fully compensate through an increase in wages. And it is very difficult, to live if at all on a minimum wage at 7.25 an hour.
3. It will not increase unemployment.
Contrary to popular belief among Austrian economists, raising minimum wage does not increase unemployment. Why? mainly because there are only around 1.3 million people (in the United States) who work for minimum wage. So a slight addition to the cost of labour to a certain group does not significantly shift the aggregate supply curve for the labour market. Here is some evidence for my claim.
NELP (National Employment Law Project) conducted a study and found that for the 22 times the federal minimum wage was raised from 1938 to 2010, the majority of the time employment went up and the times it went down can easily be attributed to the natural business cycle.
This itself should prove that increasing minimum wage has little effect on unemployment and if anything, brings it down.
Here is a piece of modern empirical evidence for my claim.
Seattle not too long ago increased their minimum wage to $15 an hour and we can already see that unemployment has actually been low and today it hovers at a measly 4% 
For these reasons, I believe minimum wage should be increased gradually.
I shall await for you to present your reasons and why it should not be raised.
I thank my opponent for his strong arguments but I will take this chance to go by point and refute them.
I would first like to start off with a very simple question that must be explained. He keeps stating that we must gradually increase the minimum wage, but how much is gradual? 50 cents? 5 dollars? 20 dollars? This must be explained in order to understand my opponent's definition of gradual. With that out of the way, let's move into a refutation of my opponents first argument.
Productivity is not due to workers, rather technology
One of the major reasons productivity has climbed is because of technology. It improves efficiency as well as production. (http://www.iofficecorp.com...) Unless my opponent advocates the paying of robots, we should not increase the minimum wage and it should stay right where it is. To prove my point, I will talk about the McDonald's Automated Beverage System or ABS
McDonald's Automated Beverage Sytstem
One of the coolest contraptions that McDonald's has is for the drive-thru workers. The ABS takes the order off the menu screen and fills up the cup by itself. All it requires the workers to do is grab the cup off the tray and hand it to the customer. Technology is what has increased productivity, it is not just humans having a better work ethic.
CEO deserves much more
My opponent tries to compare the CEO of the company to the entry level worker. Let me tell you somethimg, the man who owns the company definitely deserves to be making millions more than the entry level worker. All this entry level job is supposed to do is help them, not support a family or live off of it there entire life. The CEO though, should be able to live off his salary, and not just live off of it, but enjoy it because he is the one who OWNS the company.
What will they be purchasing?
My opponent stated that they would be able to purchase more, and he put up a graph, but here is my question. What will they be purchasing. If it is going to an arcade and placing their money in a game machine, they don't need to be purchasing that. We need to know what they will be purchasing backed up with evidence.
If my opponent claims that they people are very poor, they can apply for government subsidies. Things like WIC, food stamps, etc. These government subsidies give you not only just enough but an abundance of money to buy groceries. It gives you so much to purchase groceries a week, that people have begun selling them. (http://www.cbs5az.com...)
Little effect on reducing poverty:
He says that it is very difficult to live on minimum wage. First I refer you back to my point stating that this is not supposed to be a job you work for your entire life. Secondly, I am going to point out that it would have little effect on poverty. Eight studies were conducted since 1995 about the increase in minimum wage to determine if it would help the poor, and all but one study showed that it had NO effect whatsoever on them. Another study which examined the minimum wage increases in 2003 and 2007 showed that there was no effect on the poor even though the minimum wage was increased. (http://object.cato.org...)
My opponent has stated that this would not hurt unemployment, but I highly disagree. My opponent quoted some piecesfrom 2010, but let's look at some more recent evidence of what the increase of the minimum wage really does. Back in 2012, Obama raised the minimum wage in the American Samoa. It brought such negative economic affects and a decrease in jobs that Obama passed a bill postponing it. (http://object.cato.org...) (http://object.cato.org...)
In 2010, two economists predicted that an increase in the minimum wage would kill over 1.3 million jobs.
It is for all these reasons that the status quo is innocent. It is innocent until proven guilty which means that my opponent must prove beyond a shadow of a doubt that not only is there a problem, but increasing the minimum wage would fix all of the problems. I eagerly await my opponent's response.
"Productivity is not due to workers, rather technology"
I was getting ready to concede this point as for me I thought this would be common knowledge but upon further research this isn't actually true.
According to the U.S Department of Labour Statistics, We are not producing as efficient because of a lack of automation.
"CEO deserves much more"
I am not denying this but the gap has expended drastically and clearly as the average workers pay has increased the CEOs has increased tenfold. As I have shown in the previous graph the margins used to be much closer but now they are expanding to absurd amounts. This clearly shows a problem in the current system with revenue allocation.
"What will they be purchasing?"
Commodities of all sorts of course! The whole premise of capitalism is that we have infinite wants but finite resources when we provide an individual with more resources they will attempt to equate that with their infinite wants. They will fail to reach their goal of permanent satisfaction. Thus, rampant consumerism.
Some government subsidies are needed for things such as emerging technology or alternate fuel sources but giving poor people money out right is a broken window fallacy. You will take money out of the federal budget and give it to others just to have them put it back into the economy and eventually, back into the federal budget via taxes. This won't solve anything and it will certainly not help increase the lower class' propensity to consume in the long run.
"Little effect on reducing poverty"
The problem with these studies you have listed is they don't represent the long run effects.
For example: "A 2012 analysis of the New York State minimum wage increase from $5.15 to $6.75 per hour found a “20.2 to 21.8 percent reduction in the employment of younger less-educated individuals."
This study only studied the short term effect of increasing the minimum wage. Unlike the NELP study that I listed was over several decades. They also failed to show a direct link towards aggregate unemployment and the minimum wage.
My opponent utilised an example of American Samoa which has an extremely low population and thus the division of labour is much more homogeneous. In this case yes, unemployment would increase because the local economy is not very diverse at all. But this example cannot be used as a tautology to the greater American economy where the division of labour is vastly more heterogeneous.
I shall await your response.
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