Raising the U.S. minimum wage to $10/hour is a bad idea
Opponent's position will be that raising the U.S. minimum wage to $10.00 an hour is a good idea whose positives outweigh the negatives.
1st Round is for acceptance.
Ultimately a minimum wage is necessary to ensure the poor are paid more than slave wages. Even Adam Smith in writing "The Wealth of Nations" recognized its necessity. Smith however also recognized that with higher wages comes inflation, or increase in the price of goods, writing, "The increase in the wages of labour necessarily increases the price of many commodities, by increasing that part of it which resolves into wages, and so far tends to diminish their consumption both at home and abroad.
At any rate, my argument is not against "a" minimum wage, but too high a minimum wage. You see, while a minimum wage is necessary, by itself it does not actually fix the root problems of why the poor are poor; raising it will not give them a higher percentage of the overall wealth, as will be shown, and indeed will cost many of them their jobs.
The minimum wage was originated in 1938 at 25 cents an hour and was raised to 30 cents an hour the next year. While that may not sound like much today, back in 1940 you could buy a loaf of bread for 8 cents, a gallon of gas for 18 cents, and a new car for $1,611. The minimum wage has since been increased as follows:
Now, if raising the minimum wage were the panacea for the impoverished that progressives purport, then the poor should be better off after all of those minimum wage hikes, correct? The facts show otherwise. From 1983 to 2009 the poorest 60% of Americans lost wealth while the richest 10% of Americans got 91.9% of all wealth gain. Even though the minimum wage was more than doubled from $3.35 to $7.25, a 116% increase, the rich stole wealth from the poor. This debunks the idea that raising the minimum wage will necessarily help the poor.
The movement to raise the minimum wage ignores the reason people are poor, which is not enough employment. However, a CBO report found that raising the minimum wage would reduce employment by 500,000. As noted by Jeffrey Dorfman of Forbes on the subject:
"The reality is that families in poverty very rarely have a full-time worker in the family; in fact, only 7 percent of the time. The entire bottom 20 percent of income earners (which includes some people above the poverty line) averages only 0.42 earners per household. People are not in poverty because the minimum wage is too low, or because their hourly pay is too low even when they make above the minimum wage. People are in poverty because they are not working or not working enough. They need jobs, not an increase in the minimum wage."
A minimum wage increase is a job-killer, and this is evident from examining state employment rates. The following are the 20 states ranked by highest minimum wage, along with their unemployment ranks.
With few exceptions, states with high minimum wages tend to have very poor unemployment rates. And the highest ranked one here, Minnesota, just changed its minimum wage from $6.15 to $8.00 a few months ago, and hasn't yet had time for an unemployment increase to occur.
Job losses are the logical outcome of a minimum wage increase for the following reasons:
 http://books.google.com...;(pp. 147-48, 68-69)
 Ibid, p. 89
Con has essentially dropped all of my arguments and attempts to make this a discussion of which political side is better.
As I have pointed out, states with higher minimum wages have worse unemployment rates and those with lower minimum wages have better unemployment rates. I have also demonstrated that despite doubling the minimum wage from 1983-2009 the poor got poorer and the rich got richer. I cited a CBO report showing that the minimum wage will harm U.S. jobs.
All of this is commonsense. If you boost the minimum wage too high then the result will be job losses. You can have high employment or high minimum wages, you cannot have both. Job loss will occur for the following reasons:
The Problem: Jobs will go where labor is cheapest, that is why China is growing so rapidly. By using no minimum wage coupled with free trade agreements they have become the world's manufacturing hub. If you look at the mouse you are clicking, the shirt you are wearing, the chair you are sitting on; odds are they will say "Made in China." The major expense for many companies is payroll, in fact it can make up over half a company's expenses in industries such as healthcare and education. Therefore the easiest way for a company to increase profits is to fire workers or pay them less. If you increase the U.S. minimum wage too high it will force even companies who want to hire U.S. workers to send jobs overseas in order to stay in business.
The Solution: The solution is not a minimum wage increase but to stop trading with low minimum wage countries such as China and Mexico.
The Problem: As previously pointed out, McDonalds has reacted to the minimum wage hike by replacing cashiers with machines. The more the minimum wage is raised the more companies will look to cut back on their workforces in favor of cheaper machines.
The Solution: Tax breaks for companies who hire more U.S. workers in relation to company earnings would result in more hiring of U.S. jobs.
3. Small Business Destruction
Small businesses account for roughly 70% of all U.S. employment. Small businesses do not have the resources to outsource to low minimum wage countries or replace workers with machines; many small businesses are struggling from day to day barely making ends meet. A minimum wage hike can be the straw that breaks the camel's back for these small businesses, the vast majority of which have less than 10 employees.
4. Part-Time Increase
Companies will increasingly move to part-time jobs to avoid the higher costs under an increased minimum wage. Even federal agencies like the U.S. Census Bureau and U.S. Postal Service are increasingly hiring part-time workers since the 2007 minimum wage hike. Ironically this forces workers to work harder and more intermittently without the benefits of overtime or benefits, because full-time work is becoming too expensive for even the government to hire with. Similarly, part-time jobs are replacing full-time because of the increased healthcare costs required of employers.
Minimum Wage Hikes Linked to Recessions
In November 2006 the Democrats achieved a massive victory, taking over both chambers of Congress for George W. Bush's last two years. One of the first things on their agenda was a massive increase of the minimum wage from $5.15 to $7.25 an hour. Republican Jeb Hensarling warned them on the floor of Congress that they would spark a recession by doing so, and less than a year later the recession hit.
Similar increases in the U.S. minimum wage have been quickly followed by recessions like the 2007 minimum wage hike was. For example, when the minimum wage was hiked from $3.35 to $4.25 from 1990-91 it was quickly followed by a recession. The previous minimum wage increase before that from $2.30-$3.35 from 1978-1981 also perfectly coincided with a major recession in the United States. The major minimum wage hike before that, from $1.60 to $2.30 occurred from 1974-76, and coincided with the 1973-75 recession.
Inflation As a Result of the Minimum Wage
The logical result of a minimum wage increase is that cost of goods will go up. With higher hourly costs for gas station workers will come higher prices of gas. If grocery store workers cost more, so too will groceries. The inevitable result will be that businesses pass the higher costs on to consumers. One Seattle business has even gone so far as to reflect this price increase on their receipts.
As a result, cost of living will increase. The poor will have more dollar bills but everything they buy will cost more as well. Furthermore, CEOs will react by increasing their own pay as well, which is why the poor keep getting poorer and rich richer. A minimum wage increase does not stop CEOs from firing workers or paying themselves more. The Federal Reserve will print more dollars to reflect demand, so that dollars become worth less. Thus all that has been achieved is changing the value of the dollar, the poor do not have a higher percentage of the wealth.
If one really wanted to help the poor they should get to the root causes of why the poor are poor, such as job loss due to automation and outsourcing. I already provided specific solutions that would help the poor. One should likewise restrict CEO pay either through capping CEO pay in relation to the average worker or mandatory shareholder voting on CEO pay at publicly traded companies.
Hawkeye117 forfeited this round.
I continue to argue that the solutions I've presented thoroughly in my 2014 U.S. Budget proposal are preferable to a minimum wage in genuinely helping the poor, specifically:
1. Eliminate trade with low minimum wage countries such as China and Mexico where low minimum wage is defined as below a $4.00 per hour equivalent.
A Minimum Wage Increase Causes Job Loss and Recessions
Ultimately a minimum wage increase will result in more outsourcing of U.S. jobs. Jobs inevitably go where labor is cheapest, both at a national and state-wide level. China has overtaken the U.S. economically by outproducing us in manufacturing, using a low minimum wage coupled with free trade to parasite jobs from countries U.S., Canada, and the European Union. Westernized countries cannot compete with the low minimum wages and low worker benefit costs of China. As a result the U.S. is just one of many countries that has trade deficits with China; the entire European Union for example is running major deficits with China. At a statewide level, as has been shown, states with lower minimum wages generally benefit from higher employment, and states with higher minimum wages tend to have lower employment.
As was pointed out last round, recessions are closely linked to massive increases in the minimum wage, and major recessions have coincided with major increases in the minimum wage over the past century. Thus it was no coincidence that after Democrats raised the minimum wage in January 2007 a recession quickly followed; this has been the pattern for decades and decades.
It should also be pointed out that despite substantially increasing the minimum wage in 2007 and trillions of dollars of stimulus spending by Democrats, U.S. employment is at a 30-year low, student homelessness is at a record high, and the number of long-term unemployed has increased so much that Obama is calling for further extension of unemployment benefits for those unemployed so long they are no longer eligible. There are at least 13 million more people on food stamps than when Obama took office, with poverty at its highest level in 50 years. American incomes have dropped 6% since 2007 when Democrats passed the minimum wage increase.
Total U.S. employment in March of 2007 was 146.32 million, and did not exceed that mark until July 2014 when it reached 146.35 million. Over a 7-year period, including much of Obama's presidency and the 2007-10 period when Democrats ran Congress, there has not only been no job growth, the U.S. actually lost jobs.
In summary, the period since the last major minimum increase has seen companies doing well but not the poor as poverty has skyrocketed. In fact the companies which laid off the most workers since the recession began increased their CEO pay the most. CEOs increase profits and their own pay by reducing how much they pay their workers through outsourcing, automation, hiring illegal immigrants, and conversion to part-time work/internships.
That major minimum wage increase did not help the poor, it wrecked the U.S. economy and the lives of millions of America's working poor. So I repeat, if increasing the minimum wage would genuinely help the lives of America's poor I would be all for it. However, it will not help them, it will harm them, and destroy the small businesses that make up the backbone of U.S. employment. Therefore I strongly urge consideration of alternative ways to reduce poverty that address the sources of job loss such as excessive CEO pay, outsourcing, and automation.
Hawkeye117 forfeited this round.
Jzyehoshua forfeited this round.
Hawkeye117 forfeited this round.