The Instigator
Raistlin
Con (against)
Losing
0 Points
The Contender
Subutai
Pro (for)
Winning
7 Points

Resolved: A Minimum Wage Should Exist.

Do you like this debate?NoYes+3
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
Subutai
Voting Style: Open Point System: 7 Point
Started: 12/14/2014 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,409 times Debate No: 67042
Debate Rounds (4)
Comments (6)
Votes (2)

 

Raistlin

Con

This debate is over the minimum wage. Pro may argue from any or multiple lines of reasoning such as fairness, economic growth, living standards, moral standpoint, etc, as may con. There is one definition we need before starting this debate to remove any ambiguity.

Minimum Wage- The lowest wage permitted by law [1]

Please note that this debate is only over a government enforced minimum wage. This is why I have left out the part of the definition talking about special agreements. Any attempt to argue for a non-government enforced minimum wage is off topic. Also note that the amount of the minimum wage is not in the definition. Pro will argue that some minimum wage should exist (or may argue for a specific amount) and con will argue none should exist. Note that by this setup the BOP is shared.

Good luck to pro! Remember the first round is acceptance only and no new arguments may be made in the fourth round.

Sources
1- http://www.oxforddictionaries.com...
Subutai

Pro

I accept.
Debate Round No. 1
Raistlin

Con

Thanks to pro for accepting what promises to be an interesting debate on a hot topic. With Obama and many Democrats pushing for a minimum wage of $10.10, [1] it is important to understand the minimum wage's effects on the economy.

To start of with, I will make an argument based on the proper role of government.

To start with, we have a few definitions. I define a non-aggressor as one who does not violate the person or property rights of others through physical force or threat of physical force. Secondly, I will define a government as an entity possessing, or claiming to possess, a monopoly or near monopoly on the use of force. Secondly, I define the non aggression principle (hereafter NAP) as the following: "The initiation of physical force or the threat of doing so against a person or his property is morally wrong." From this simple, guiding principle, the entire ideology of libertarianism/classical liberalism is derived. Third, I will define "libertarianism" as "the political philosophy consistent with the NAP." Finally, I define society as "The aggregate of people living together in a community," a slightly shortened version of the Oxford dictionary definition.

However, to attempt to derive this position without demonstrating or at least providing justification for the truth of its fundamental principle would commit the fallacy of begging the question. Although the concept of not taking people's property or hurting their person is intuitive, intuition has led mankind to all sorts of illogical or reprehensible behaviours ranging from communism to geocentricism.

Consider a very fundamental question; who is entitled to the ownership of a person? Intuitively, the person himself would own his person. There are essentially two alternatives: that one class of persons owns another, or that everyone is owned by society. I won't spend much time on the former option of class ownership as I highly doubt this audience believes in the divine right of kings or any other such nonsense. Instead, I will address the question of whether each individual is owned by society as a whole. This implies that if "n" number of people live in a society, everyone owns a "1/n"th share of everyone else. In other words, the ownership of an individual is divided evenly among members of a society. However, it is illogical to suggest that others have a more legitimate claim on your person than you have on your own. It is simply ludicrous to suggest that an individual owns everyone except himself. Therefore, the only logical answer to this question is that each individual is entitled to the ownership of his person.

Obviously, if each person is entitled to the fundamental right of self-ownership, then we have solved the problem of initiating violent force against a person. That would clearly violate this right, and must therefore be wrong. However, my opponent may rightfully object that we have not yet proven to satisfaction the question of fundamental property rights. We will now show that property rights are a direct consequence of self ownership. If I own my own person, than it follows that I own my labour. If I own my own labour, than it follows that I own the fruits of my labour, and this we call property. Property is created by mixing labour with resources, and by doing so, so long as the resources are not the property of another person. Therefore, if I possess ownership of my property, it is morally wrong to initiate force, or to threaten the initiation of force, against my property. This completes our justification of the NAP.

However, there is one very significant question left: what should we do to those who violate this principle? The only satisfactory answer is to retaliate with force. Those who ignore reason in favor of force must face forceful consequences. This is where government comes in. If individuals are unable to maintain the NAP on their own because they are outgunned, a state is necessary to monopolize force and minimize the use of aggressive force. This is the justification for having a state in the first place.

Now, does extending a fully voluntary contract to someone that pays less than a given amount violate the NAP? Clearly not. Therefore, the government ought not ban contracts for wages lower than a certain amount by establishing a minimum wage.

Next, I will make a practical argument from economics. By the laws of supply and demand, the quantity demanded of anything has a negative association with its price, and the quantity supplied has a positive association with price, respectively. [2] In the market for a particular type of labour, "wages" are the price of the labour, and "labour" is the product demanded. The minimum wage is the price floor set by the government. In a market in which the equilibrium price is above the minimum wage, there will be no change. However, in a market in which the equilibrium wage is below the minimum, employment will decrease, because businesses will be willing to purchase less labour, proved by the law of demand. [3] Therefore, the minimum wage will increase unemployment. Also, it can be shown that there is a decrease in total surplus in the market. [3] Therefore, the minimum wage always harms businesses and helps only some workers at the direct expense of the employers. Another bad effect of the minimum wage is on markets in which the utility provided by the workers is less than the minimum wage. These jobs would be destroyed because a business would have to pay more than it receives to keep these jobs.

Very few people actually make the minimum wage, suggesting it does not help very many people. According to the Bureau of Labour Statistics, only 1.5 million workers made the minimum, and more than half of these are younger than 24. [4] In fact, 64% are only part time workers. [4] The people it affects most are young part time workers who probably aren't worth as much in economic terms and those left unemployed by its negative economic effects. The minimum wage worker is clearly not the traditional image of a hard working factory man struggling to feed a family. This is just a myth.

That's all for now. As the burden of proof is on pro, I will probably be focusing mostly on his points, which are as of now yet to be made. Good luck!

Sources
1- http://www.whitehouse.gov...
2- http://www.investopedia.com...
3- https://www.boundless.com...
4- http://www.bls.gov...
Subutai

Pro

I would like to thank Raistlin for presenting his arguments.

Why the Minimum Wage?

The main reason is that it gets people out of poverty. This important consequence has a number of possible effects. It reduces the need for welfare, because every worker has more money in their pocket. The need for welfare in an ideal minimum wage system would only extend to the homeless. Indeed, it even has some subtle positive effects on businesses. "For businesses, it can reduce churn, increasing retention in ways that avoid the cost of hiring and training new workers." All and all, the minimum wage is a policy that allows for a greater distribution of society to live in relative comfort.[1]

Evidence for the Minimum Wage

Evidence tends to go back and forth between the two sides in the debate. However, when the data is analyzed, the correct conclusion is the pro-minimum wage side. The anti-minimum wage side relies on a misinterpretation of the data presented by studies. There are many data measures that could be used, but the three I will use are consumption, income inequality, and unemployment.

Consumption - The evidence here comes down solely on the pro side. "A pay hike of $1.75 an hour, smaller than currently proposed, would augment purchases by at least $48 billion in the first year, according to a 2013 paper by the Federal Reserve Bank of Chicago economists." The more money given to workers does take away money from the business owners, but they are much more likely to spend that money than the business owners are. "Low-income workers have a higher propensity to consume than the wealthy, because the latter are not nearly as income-constrained." Overall, the minimum wage allows a greater amount of consumption in the economy, which raises the GDP more, allowing for everyone to have more money.[2]

Income Inequality - This one should be rather obvious as well. The minimum wage takes money from the wealthy business owners and gives it to the poorer workers. The US has one of the largest levels on income inequality in the developed world, and the US has one of the lowest values for the minium wage in the developed world.[3]

Unemployment - This is probably the biggest point of contention in this debate - does the minimum wage positively or negatively impact unemployment? There have been many studies on both sides, and I will address any of the studies my opponent brings up on his side when the time comes, but I want to address my side. One of the most famous studies, the Card-Kreuger study, concluded that, "
Again, these results point toward a relative increase in employment of low-wage work-ers in New Jersey. We also find no evidence that minimum-wage increases negatively affect the number of McDonald's outlets opened in a state." In other words, it found no negative correlation between the minimum wage and unemployment, and even hinted at a positive one.[4]

Why Is This Important?

This is probably a pressing question. As I mentioned earlier, the minimum wage cuases there to be less spending on welfare, which is obviously a positve for taxpayers. However, due to the increased consumption and income inequality, crime (particularly theft) decreases in frequency due to the fact that people have more money overall. In addition, income inequality causes social cohesion to erode, due to the increased feeling of separate classes that one cannot get out of, and of the shadow economy, which exists to fill the needs of those who don't have the money to operate in the normal economy. Because the minimum wage reduces income inequality, these effects are lessened, and society is better off in general.

But it is even positive for businesses. As I've already explained, the minimum wage increases consumption and the average time people spend at a single job, which both increase GDP, and gives the wealthier business owners more money due to the stronger economy. It may even fully recoup, if not make a net positive out of their losses due to the minimum wage. The increased consumption also allows for greater increases in GDP, which would reduce the effects of recessions, which is obviously good for businesses.

I will consider my opponent's arguments against the minimum wage in the next round.

Sources

[1]: http://www.whitehouse.gov...
[2]: http://www.bloomberg.com...
[3]: http://www.epi.org...
[4]: http://davidcard.berkeley.edu...
Debate Round No. 2
Raistlin

Con

Pro has brought up some interesting points regarding the minimum wage. I will address them and then turn to dropped arguments. Before I go on, I would like to give a fair warning: there is math ahead.

Firstly, I will talk about the flaws in pro's consumption argument. We now turn to the fundamental identity that defines real GDP, which is represented by Y.

Y=C+G+I+NX

Where C is consumption, G is government, I is investment, and NX is net exports. For simplicity's sake, we will only consider a closed economy, so NX is zero.

Y=C+G+I

Now, an factor that causes an increase in one factor may provide a decrease in another. For example, increasing government spending whilst increasing taxes on companies will decrease investment. By taking money out of the pockets of companies that want to purchase capital goods, which increase long term production, long term economic growth may be harmed. This is what the minimum wage does. It takes money out of the pockets of businesses, that are more likely to invest, and gives it to those not fired, who are more likely to consume. [1] Whilst it is true that the minimum wage increases consumption, it "has no discernible impact on overall GDP and could actually hinder growth in certain low-wage sectors," according to a study by Joseph Sabia. [2] I will talk about unemployment in a little bit.

It seems we are going pretty deep into economics, so I will introduce a factor known as demand elasticity with respect to price. Its definition is "the absolute percent change in quantity demanded divided by the percent change in price." [3] This concept is extremely important in understanding the economics of the minimum wage. If the quantity demanded changes a lot with respect to price, we say the demand is elastic. Now, if the demand curve for the fast food restaurants is elastic, then with an increase in the minimum wage we would see a large decrease in the labour demanded, leaving more people without jobs. In this case, unemployment would measurably increase. However, in cases where the amount of labour demanded is inelastic, meaning it doesn't change much with an increased wage rate. In this situation, it would be harder to observe the effects of the minimum wage, and it may be a small enough increase that other, random factors would obscure the change. Now, the Card-Krueger study picked an extremely inelastic market available to study. The fast food industry is mostly focused on technological capital, not having a large number of employees. [4] For these restaurants, the name of the game is basically to hire just enough workers to man the machines. Therefore, we can expect that, since they already hire almost the feasible minimum amount of workers, they will not be able to sack workers without taking a major hit in productivity, implying their demand curves for workers would be highly inelastic. If Card/Krueger had chosen a more elastic market, they may have been better able to document the effects of the minimum wage.

However, there is unfortunately another reason why the study failed to show a decrease in employment. They did not correctly analyze the data. According to a later paper published by David Neumark and William Wascher in the American Economic Review, the same paper that published the Card-Krueger paper, the same data actually showed the increased minimum wage led to an approximately 4% decrease in employment. [5] Card and Krueger were proven wrong. Unfortunately for them, bad analysis leads to incorrect conclusions.

Pro also talks about income inequality. However, he fails to show income inequality is a bad thing. Income inequality is the measure of the difference between the successful and the very bottom. The more successful people are, the higher this will be. Until pro proves to us there is something morally wrong with income inequality, there is no reason to believe there is.

Finally, pro claims "The main reason (for the minimum wage) is that it gets people out of poverty." This is a nice sentiment, but is unsupported by evidence. A study by the National Bureau of Economic Research found "no compelling evidence" that the minimum wage reduces poverty, writing that it pushed some families out of poverty whilst pushing some into poverty. [6]

Now, we have a significant problem to address. Pro failed to address my arguments last round. To drop an argument means to fail to respond to it at first opportunity. Pro has therefore dropped my arguments and, by standard debate etiquette, my arguments should be considered true for the remainder of the debate. However, in the spirit of a good debate, I shall allow pro one more round to address these arguments. I had a rough time a while ago with dropped arguments, and I have some sympathy. [7] Please do not let this happen again.

Good luck to pro once more!

Sources
1- http://www.stlouisfed.org...
2- https://www.epionline.org...
3- http://www.investopedia.com...
4- http://www.forbes.com...
5- Neumark, David, and William Wascher. 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment." American Economic Review, 90(5): 1362-1396.
6- http://www.nber.org...
7- http://www.debate.org...
Subutai

Pro

I would like to thank Raistlin for continuing his arguments.

Before I begin, I'd like to say that I dropped nothing. I explicitly said that I would consider your first argument in this round. I didn't have enough room to adequately refute your original argument in my first argument, so I devoted this round to doing so.

Self-Ownership

The whole idea behind self-ownership Libertarianism is that each person owns his or herself. However, the whole idea rests upon a paradox: "Self-ownership conflicts with Pareto-Optimality...[S]ince self-ownership is construed by libertarians as an absolute right, it follows that it cannot be violated even in small ways and even when great benefit would accrue from doing so. Thus...absolute rights of self-ownership seem to prevent us from scratching the finger of another even to prevent the destruction of the whole world. And although the real objection here seems to be to the absoluteness of self-ownership rights, rather than to self-ownership rights as such, it remains unclear whether strict libertarianism can be preserved if rights of self-ownership are given a less than absolute status." In other words, my opponent's theoretical argument rests upon a paradoxical assumption.[1]

Another problem with my opponent's argument is that it rests upon the idea that no voluntary contracts can be made where the wage is lower than the minimum wage. To a certain extent, this is true. However, "The minimum wage law (the FLSA) applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000." In other words, two individuals can make a voluntary contract to sell one's services to the other without the need for the minimum wage. When applied to businesses, the needs of the many workers who depend on the minimum wage is more important than the wants of a few employers to make contracts with people with wages below the minimum wage.[2]

The whole idea of "self-ownership" and "voluntary contracts" doesn't have much of an effect in a debate on the minimum wage. The vast majority of people making the minimum wage need more, and rightfully should earn more, but the contracts they are able to form prevent this from happening. Forcing contracts to provide a wage at or above a minimum wage is good, simply because the benefits that it accrues to workers are enough. Indeed, as I will show below, the minimum wage doesn't have a noticeable effect on the amount of people in contracts.

Economics

Unemployment - While my opponent's argument that the minimum wage causes unemployment appears valid, reality is different. Empirical studies that track unemployment changes with changes in the minimum wage consistently show that the minimum wage has very little to no effect on unemployment. One need look no further than a chart showing the real value of the minimum wage against unemployment:



There is no visible correlation between the minimum wage and unemployment. One, raising the minimum wage should have an immediate effect on unemployment, but that isn't seen. And two, any short term correlation (i.e. from the past recession) is post hoc ergo propter hoc logic and only in the short-term. In the long term, there is no correlation.[3]

In addition to the Card-Krueger meta-analysis, Doucouliagos and Stanley also put forth one, considering 64 minimum wage studies in the past 30 years. "Doucouliagos and Stanley concluded that their results '...corroborate (Card and Krueger's) [which I'll talk about later] overall finding of an insignificant employment effect (both practically and statistically) from minimum-wage raises.' In their view: 'Two scenarios are consistent with this empirical research record. First, minimum wages may simply have no effect on employment... Second, minimum-wage effects might exist, but they may be too difficult to detect and/or are very small'"[4]

The results can be shown here:



This shows that the most precise studies showed no correlation between the minimum wage and unemployment.

Besides faulty and imprecise methodologies, why do a lot of studies conclude that the minimum wage does affect unemployment? It's because they forget the definition of unemployment. To be considered unemployed, one must be unemployed and be actively looking for a job. When the minimum wage increases, those who were economically alienated by the past minimum wage start looking for jobs again, and this manifests itself in the unemployment rate. So actual unemployment (the U-6 unemployment, if you will) does not increase at all, and may even decrease after a bit. I venture to guess that most, if not all studies that concluded that the minimum wage increases unemployment failed to take account of this fact.[5]

As for my opponent's criticism of the Card-Krueger study, both of his points are invalid. One, his claim that the fast food industry is inelastic is flat out wrong. In fact, the fast food industry is relatively elastic. Fast food is popular now mainly because it's cheap. If it becomes more expensive, people will find other ways. And two, the study that my opponent cites that supposedly reanalyzed the Card-Krueger study data, were reanalyzed itself by Card and Krueger, and found to be incorrect.[6][7]

Consumption - But the money lost to the businesses those employees work for would be recouped by the businesses the employees are spending more money with (because they have more money). "Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs over that period." The increased consumption outweighs the lost investment potential.[8]

Income Inequality - I've already shown how income inequality is a bad thing. It raises crime rates (particularly theft), social cohesion is eroded, drains the welfare system, and people more rely on the black market. Education, health, and many other things are also at lower levels for the poor. And as I've also explained earlier, the lower classes spend a larger portion of their income than the wealthy do. This means that the less income inequality there is, the net GDP goes up. So higher amounts of income inequality cause more problems and lower GDP, and this is why income inequality is bad.[9]

Who Gets the Minimum Wage?

For those who are at, or near the minimum wage level, the minimum wage is very helpful by putting a price floor on how much employers need to pay them. In addition, raising the minimum wage from $7.25 to just $10.10 (modest compared to some countries) would, "An increase to $10.10 would either directly or indirectly raise the wages of 27.8 million workers, who would receive about $35 billion in additional wages over the phase-in period."[8]

As for the claim that only teenage, part-time employees receive the minimum wage, "Among affected workers, the average age is 35 years old, nearly 88 percent are at least 20 years old, and more than a third (34.5 percent) are at least 40 years old. Of affected workers, about 54 percent work full time, about 69 percent come from families with family incomes less than $60,000, and more than a quarter have children. The average affected worker earns half of his or her family’s total income." As can be seen, the minimum wage is a very important part of a lot of people's incomes.[8]

Sources

[1]: http://www.iep.utm.edu...
[2]: http://www.dol.gov...
[3]: http://aneconomicsense.com...
[4]: http://www.cepr.net...
[5]: http://www.oecd.org...
[6]: http://spot.colorado.edu...
[7]: http://web.stanford.edu...
[8]: http://www.epi.org...
[9]: http://money.cnn.com...
Debate Round No. 3
Raistlin

Con

Before I get into pro's arguments, I need to address the dropped arguments.

Pro-"Before I begin, I'd like to say that I dropped nothing. I explicitly said that I would consider your first argument in this round. I didn't have enough room to adequately refute your original argument in my first argument, so I devoted this round to doing so."

This is disappointing. Let's look at DDO's definition of a dropped argument.

"Drop - An argument is dropped when it is not responded to. Arguments that are dropped are usually considered true for the remainder of the debate. You must respond to an argument once it is made, you cannot wait until the next round." [1]

Pro claims he had no room, but he used 4390 out of 8000 characters in the second round, leaving him with 3610 characters, or 45%, to rebut my arguments. Please note I'm not calling pro a liar, but his claim doesn't match reality. However, I said I would extend those, so I stand by that.

Also, pro dropped my argument about there being no compelling evidence that the minimum wage reduces poverty. No mercy this time.

Now for pro's attempt at rebutting my case from libertarianism. Pro quote mines the Encyclopedia of Philosophy. He begins, "Self-ownership conflicts with Pareto-Optimality," but the full quote is "Richard Arneson, on the other hand, has argued that self-ownership conflicts with Pareto-Optimality." [2] He states this as a fact when it is merely an opinion. He then gives a ridiculous example of scratching a finger to save the world. A libertarian would simply ask permission, although this scenario is obviously unrealistic. Pro states that self ownership is paradoxical because it is not utilitarian in nature, but this is a non sequitur. There is no logical contradiction identified by pro, merely an objection. Pro has failed to answer my argument.

Pro-"When applied to businesses, the needs of the many workers who depend on the minimum wage is more important than the wants of a few employers to make contracts with people with wages below the minimum wage."

Who are you to judge whether the needs of some outweigh the needs of others?This is an entirely subjective statement with no basis in fact. I do not trust the government to tell me whose needs are more important than others.

Pro- "The whole idea of "self-ownership" and "voluntary contracts" doesn't have much of an effect in a debate on the minimum wage."

I thought I explained why these concepts are important. If individuals want to make a contract below the minimum wage and the employer happens to be involved in interstate commerce or deals in at least $500,000, they cannot make a voluntary contract that would benefit both parties. Therefore, the minimum wage violates their right to voluntary contract.

Pro-"The vast majority of people making the minimum wage need more, and rightfully should earn more, but the contracts they are able to form prevent this from happening."

How did you decide that people earning the minimum wage should earn more? This statement is subjective and arbitrary. A worker should paid exactly the amount he can fairly earn in the free market because that is his economic value, the objective standard by which "fair" pay ought to be decided. The minimum wage interferes with the free market by artificially raising wages without increasing value. In fact, studies show that the minimum wage harms the productivity of a worker long-term. [3]

Pro-"While my opponent's argument that the minimum wage causes unemployment appears valid, reality is different."

Notice there's no refutation of my argument, merely claiming reality is different. This is because it doesn't make sense for low-cost labour to be magically exempt from the law of demand, one of the most fundamental concepts in all of economics.

Pro- "One need look no further than a chart showing the real value of the minimum wage against unemployment."

No statistical analysis, we are just supposed to look at a graph and try to spot a trend. This is indicative of a weak case. Also, a lot of factors might influence pro's graph that aren't shown, so there is no way to draw conclusions from the graph. Also, nobody is claiming a statistically significant effect on all employment, merely low-cost labour.

On to pro's new study. Pro claims that more precise studies tend to show a smaller decrease in employment. Firstly, for a small change in the minimum wage one would expect a small change, possibly even a missed change, in employment levels. Secondly, studies with low standard errors are more likely to show a low level of change by simple statistics. Given the nature of the probability distributions of the standard error, one would expect that it would be most likely to encounter an abnormally small standard error with data clustered near zero. Standard error is a statistic, not a parameter, and it may differ from the standard deviation, which is the parameter. An abnormally small standard deviation indicates that the data were more clustered than data gathered by a simple random sample would be, indicating flawed methods of sampling. Note that the vast majority of studies in that chart showed a decrease in employment.

A large factor in the results of Doucouliagos and Stanley is they provided no controls for the quality of the studies shown. A more reliable meta-study of over 100 other studies was conducted by Neumark and Wascher in which they controlled for quality. Quoting directly, "However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages."

Pro then claims that more people enter the labour force when the minimum wage increases. This claim is unwarranted because of his odd choice of source. If you follow the link he provides, you will find that his source leads to a paper about the status of working women and has nothing to do with the minimum wage.

Pro defends the Card-Krueger study cited last round. He claims that the fast food industry is demand elastic. It is true that its product's demand is elastic, but pro didn't answer the point about the elasticity of the industry's demand for labour. Pro seems to have gotten those confused. Secondly, he states that Card-Krueger (CK) reanalyzed the Wascher-Neumark study and found it incorrect. However, CK's analysis focused on number of employees rather than total hours, which is the real question. [4] Thus, their study is less reliable.

Finally, because the changes in the minimum wage are relatively small, a large effect on employment is not expected. The effect may be small, but we know it's there because of unbreakable economic laws.

On consumption. Pro claims increased consumption will benefit businesses more than increased investment and profits. Every cent that the minimum wage gives is taken directly from the business. Increased consumption may help alleviate this, but it cannot do more than the decreased investment. Also, pro claims increasing the minimum wage to $10.10 would create 85,000 jobs, but the nonpartisan CBO reveals it would cost 500,000 jobs. [5]

On income inequality. All of the effects pro attributes to income inequality are to poverty, and this is exactly what his source says. I established last round that the minimum wage doesn't help poverty, a dropped argument by pro, so the minimum wage wouldn't help with these bad effects.

Pro is straw manning by saying, "As for the claim that only teenage, part-time employees receive the minimum wage..." I pointed out a large demographic of minimum wage workers.

Sources
1- http://www.debate.org...
2- http://www.iep.utm.edu...
3- http://www.nber.org...
4- http://web.stanford.edu...
5- http://www.cbo.gov...
Subutai

Pro

I would like to thank Raistlin for this debate.

The fact that you won't accept the fact that I posted the arguments in round three just because they were in round three isn't fair. My round three argument was just below 8000 characters, so I would have had to cut it significantly to fit in into round two. I planned on that - I was going to make my own arguments the first round, and address your own in the second round. And I didn't drop the poverty argument. I will use this round to address your concerns with my own arguments. I addressed everything this round. And you can't impose a debate structure without first articulating it in round one.

Arguments

I will split my arguments the way my opponent did, but I will save space by not quoting my opponent.

Pareto-Optimality

We're both making arguments. What you're arguing against is at least just as invalid as what he's arguing for. If all personal observations are wrong, there's no point in arguing.

He's using reductio ad absurdum to make his case. While the case is indeed not realistic, that is the point of the argument - to show that one application of an arguments leads to an absurdity. What if the person doesn't allow them to scratch his finger? Are we going to have to respect his rights more than the continuation of the world? This is a valid objection, and this addresses your argument directly because your whole case rests upon self-ownership libertarianism, which I have just shown leads to an absurdity.

Worker's Needs

What you're saying is that the raising up of millions of workers should not be more important than the preservation of a few wealthy people's fortunes, which would only be affected a very small amount by a minimum wage. In the end, the minimum wage allows more people to live better.

Voluntary Contracts

Indeed that is true. But wroth cannot be attached subjectively. Labor is worth something, and the minimum wage makes sure that this value is not subverted. Further, unemployment doesn't seem to be a problem, so it's not like workers are finding a lack of available contracts. Further, if the minimum wage helps businesses (which I hope to have shown in my arguments), why argue against it simply because of some inherently fallacious ideal?

Worker's Worth

I addressed the majority of this point above, but I will say that the minimum wage actually does increase productivity. I said before that it helps reduce employee turnover. Reduced employee turnover leads to savings by the employer because it spends less on recruitment, re-training, and re-staffing. As a result of lower turnover, these employees will be more experienced, and consequently more productive. Plus, if an employee is getting paid more, he lives a better life, and has a greater incentive to produce better.[1]

Unemployment

The first graph showed how the correlation wasn't there. No mind the causation, but if the correlation isn't there, there's no relationship between the two data sets. If the minimum wage caused unemployment, we should see it, but we don't.

It doesn't matter if the number of studies on one side outnumbers the number of studies on another. If the vast majority of the studies from the numerically superior side used imprecise or inaccurate methodologies, they don't have much value. Further, as I said in the last round, "Two scenarios are consistent with this empirical research record. First, minimum wages may simply have no effect on employment... Second, minimum-wage effects might exist, but they may be too difficult to detect and/or are very small." The key emphasis is on the last sentence - even if there was some residual negative correlation, it was too small to make any difference.[2]

The Neumark and Wascher study was flawed. In 2009, a meta-analysis study examining publication bias argued that the existing data and Neumark and Wascher’s conclusions were not consistent, stating "...the contrast between their subjective narrative review and the meta-analysis is quite striking. Another 2011 study by Berkeley researchers argued that Neumark and Washer did not properly interpret the studies because they did not take into account that many of these studies used flawed experimental approaches. These researchers stated that "...interpretation of the evidence in the existing minimum wage literature (such as those reviewed by Neumark and Wascher) must be revised accordingly."[3][4]

Considering that the Card/Kreuger and Doucouliagos/Stanley meta-analyses had a much better methodology, and showed that all the studies that showed a statistically significant negative effect on unemployment used improper methodologies, we should conclude that those two studies are more reliable than the Neumark/Wascher study. The use of the number of employees in the Card/Kreuger doesn't matter. "Despite the claims of these critics, there has been no peer-reviewed research to date that contradicts the findings of Card and Kreuger or supports the claim that an increase in the minimum wage increases unemployment." And the Doucouliagos/Stanley study provided many controls. "Doucouliagos and Stanley's results held through an extensive set of checks, including limiting the analysis to what study authors' viewed as their best (usually of many) estimates of the employment impacts, controlling for possible correlation of estimates within each study, and controlling for possible correlation of estimates by each author involved in multiple studies."[2][5]

My opponent doesn't address my labor force participation argument at all. The OECD showing that women's unemployment only goes up due to more participation and not because of MW per se. But, it can stand on its own without a source, and has essentially been dropped.

Consumption

My opponent seems to concede that the minimum wage increases consumption. He provides no data on how the minimum wage effects investment. One method of measuring investment is: "Business investment includes the construction of new offices and factories, and the purchase of machinery, computers, and any other equipment used to assist labor in the production of goods and services." Since productivity increases, this would increase. Overall, my opponent's argument lacks substantiation.[6]

Income Inequality and Poverty

This study found that as many as 23 million workers would benefit from a moderate increase in the minimum wage (to $10.10, I believe). I hardly see how this would effect the others in poverty. No poor person loses anything by raising the minimum wage. They can only gain.[7]

Teenage and Part-Time Unemployment

I did not mean to say all, but that doesn't make my arguments any less valid. The minimum wage is important to millions of primary bread earners. My opponent never addressed this argument at all, only criticizing a slight mistake in my wording.

Conclusion

The minimum wage is a net benefit to workers and to the economy. It puts more money in the hands of workers, which increases consumption and decreases crime. There is no measurable effect of the minimum wage on unemployment, and any studies that show otherwise either use improper methodologies, or forget how the US government defines unemployment. Even for the business owners, while it takes some of their money away, the workers stay with them longer, and are more productive, so, on balance, even the supposedly negative effect on them is significantly reduced, if not eliminated. A minimum wage is an important and beneficial policy that needs to be kept.

Sources

[1]: http://www.irle.berkeley.edu...
[2]: http://www.cepr.net...
[3]: http://www.deakin.edu.au...
[4]: http://escholarship.org...
[5]: http://www.uvm.edu...
[6]: http://www.colorado.edu...
[7]: http://epi.3cdn.net...
Debate Round No. 4
6 comments have been posted on this debate. Showing 1 through 6 records.
Posted by 16kadams 2 years ago
16kadams
Also, most of the new studies are seriously flawed and throw out a lot of useful data (Neumark, Wascher, Salas 2013). And most rigorous studies find negative effects (Neumark and Wascher 2008). So that graph is misleading, but whatever, you won still lol.
Posted by 16kadams 2 years ago
16kadams
Hey subutai, the graph of the meta-analysis proves con's point, as most of the elasticities are about -0.1 to -0.3, which are the "consensus" estimates (see, e.g. Neumark and Wascher 2007, 2008, 1997). Which means that a 10% increase in the minimum wage means 1-3% decrease in employment, which is pretty significant. Further, that chart is found using the argument that there is publication bias in the literature. However, this is not fully proven (see, e.g. Neumark and Wascher 1997), and is pretty absurd. Myth and Measurement (Card and Krueger) was published in a mainstream publication, the Princeton Press. Further, their studies were published in a wide array of journals. The 'new' wave of research by Reich, Lester, and Dube which claim to find no effect have been published by many mainstream publications. According to Wascher (personal correspondence), he sees that editors are just as likely to publish dissenting opinions as they are to publish the consensus estimates. Therefore, that meta-analysis picture *reduces* the amount of those on the negative side pretty arbitrarily.

Second, the graph which shows no correlation I actually had sent to a labor economist. He responded that the graph fails to take into account other factors, a control variable, or employment *dynamics*. Most minimum wage research--like that--focuses on unemployment changes. Dynamics is about employment *growth*. And he finds in his research that employment *dynamics* are negatively affected my minimum wage changes, and when other factors are accounted for, employment drops too. And employment and unemployment are different things, as our system counts unemployment oddly.

Anyway, just wanted to critique your argument. Now time to read the whole thing and vote.
Posted by Raistlin 2 years ago
Raistlin
I ran out of space to say it, but it's been a good debate. Merry Christmas!
Posted by cheyennebodie 2 years ago
cheyennebodie
Government intrusion NEVER has a positive effect.Any job that pays $7.50 an hour is a job that has a very low skill level.That is all they should get. If a real man wants to make more, he simply increases his skill level. A crybaby will sit and wait for government to increase his pay.And cty if they do not get what THEY think they should have.
Posted by TheNamesFizzy 2 years ago
TheNamesFizzy
Going to watch
Posted by Latomus 2 years ago
Latomus
Looking forward to seeing this debate. Sounds interesting.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by 16kadams 2 years ago
16kadams
RaistlinSubutaiTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:03 
Reasons for voting decision: The argument as to whether or not minimum wages would materially affect people is really what got my attention. Generally, the person who can show that something harms someone or helps someone generally gets my vote. PRO demonstrated a need for help. A large income inequality, for example. PRO then claimed that minimum wages merely redistribute the wealth, and have no net-effect on employment. It became a bit of a source war, but overall, PRO was able to better empirically prove his case against CON. Using a meta analysis and a basic time series graph, as well as support from peer-reviewed literature (and some biased think tanks... EPI... But whatever) was able to prove that minimum wages do not harm anyone, and that in many cases improve the lives of the poor. I already stressed my disagreement in the comments, but PRO was able to soundly refute CON's arguments in regard to employment effects, and proved that minimum wages benefit society. So I vote PRO.
Vote Placed by jzonda415 2 years ago
jzonda415
RaistlinSubutaiTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:-Vote Checkmark-1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:04 
Reasons for voting decision: The majority of Con's case relied upon the libertarian principle of self-ownership, which Pro defeated and showed how absurd the logic of that can become through his example with Pareto-Optimality. Con's response of just asking for permission didn't hold up, as Pro pointed out, and his case truly fell apart from there. Pro gave the benefits of the minimum wage with unemployment, showing that the more reliable studies proved negligible effects or positive and that there was no correlation with unemployment. Pro also won with income inequality; Con was not able to adequately show that income inequality was good or refute the effects minimum wage has on it. Pro also won on consumption, seeing as Con was unable to prove the minimum wage's effect on investment. I also gave conduct to Pro seeing as Con kept crying foul on Pro for posting an argument in a later round, which I didn't really see the point of. S&G and Sources were tied. Confident Pro win, but good debate!