The Instigator
drewsaphor
Pro (for)
Losing
0 Points
The Contender
TruthHurts
Con (against)
Winning
31 Points

Should Minimum Wage be reduced to the 1964 rate of $1 an hour in the US

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Post Voting Period
The voting period for this debate has ended.
after 6 votes the winner is...
TruthHurts
Voting Style: Open Point System: 7 Point
Started: 7/23/2014 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,432 times Debate No: 59452
Debate Rounds (2)
Comments (22)
Votes (6)

 

drewsaphor

Pro

The Minimum Wage should be reduced to $1 an hour in the US

Reasons:
1. Prices for goods will reduce to reflect the reduction in labor costs.

2. The US Dollar will become stronger, because it will be able to buy more goods.
TruthHurts

Con

Note that Pro has the sole BOP in this round, and is nowhere close to meeting it. He has made two dubious claims, without a single shred of evidence for either. As a result, I will move into rebuttals immediately.

I. "Prices for goods will reduce to reflect the reduction in labor costs."

Firstly, this is completely unsourced, and is, therefore, an assertion.

Secondly, any reduction in costs would not be equivalent to the reduction in wages. For example, note that for most fast food restaurants, labor is only 25% of costs [1]. This means that, with a roughly 85% reduction in labor costs, a burger that is $4 in the status quo will only drop, in cost, to $3.15, or around a 22% drop.

This means that while products may be cheaper, the average person's ability to buy them will be diminished exponentially worse, meaning businesses will sell less, which will lower GDP, and, overall, cramp economic growth. This leads to a much worse standard of living for the average American.

Thirdly, my opponent assumes, without merit, that a company will automatically lower prices significantly. A company could also invest the saved costs back into the company (a la Wal Mart), or simply take the profit [2]. Basic economics is simply insufficient with regards to the labor market.

Thus, economically, this would be catastrophic.

II. "The US Dollar will become stronger, because it will be able to buy more goods."

This does not make sense. Again, firstly, this is unwarranted and without evidence.

Secondly, currency strength is only partially related to the cost of goods [3]. Other things, like government interventions and economic shocks, are also involved.

Thirdly, currency strength is but one measure, and does not mean that the country is economically strong [4]. Note, in my previous source, that 7 of the top 10 strongest currencies are not from countries that are economically strong in terms of standards of living.

Conclusion

My opponent has only made assertions, without evidence, which cannot meet the BOP. Even besides this, his assertions are incorrect and irrelevant, respectively. He will need to do better.

Sources:

1. http://smallbusiness.chron.com...
2. http://www.slate.com...
3. http://www.thisismoney.co.uk...
4. http://www.foxnews24x7.com...
Debate Round No. 1
drewsaphor

Pro

Prices for goods will reduce to reflect the reduction in labor costs.

When you just look at the retail cost, then you are not seeing the entire picture. You forget that cost to produce and transport of the products used in the fast food restaurants will be reduced as well. There is many levels of labor spending for a product that is sitting on the shelves in retail. So we could expect the cost of the product wholesale price to go down due to the cost of labor for 1. Transportation, 2. Warehouse, 3. Production, 4. Cost for labor from the energy companies. Price for labor for oil companies.
You are only looking at this from one view. Product cost would reduce in the same way it would in the retail environment.

The price of a hamburger in 1953 was 15 cents, and the minimum wage was 75 cents

The price of kelloggs corn flakes when the minimum was $1 cost 2% of the hourly wage, and now its 3%.

I retract about the strength of the dollar.

New point.
With a lower wage, companies will have the opportunity to make the job market competitive for a higher wage.
You will be paid for what the company believes you are worth.

New Point.
With lower competitive wages, the US will be able to bring manufacturing back to the US. The high minimum wage does not make the products made in the US competitive with imports. Most countries have a lower minimum wage.

In Conclusion
The problem is unemployment, not minimum wage. Lowering the minimum wage will stimulate the job market.

http://www.forbes.com...
John T Harvey is an economics professor at Texas Christian University, Phd in economics.
http://americandigest.org...
Contains a picture of McDonald's menu with prices
http://www.tvhistory.tv...
Retired Engineer that collects information on American History as a hobby
http://www.foodtimeline.org...
Lynn Oliver Food Historian and Librarian
http://www.dol.gov...
Robert I. Lerman Professor of Economics at American University
http://aspe.hhs.gov...
Government Website
TruthHurts

Con

Again, this is all just assertion, without any evidence to back it up. I will not, either, dig through your sources to find out where (or if, as the one I clicked did not support anything you said) they support your argument. Your job, not mine.

I. Prices will decrease (Or; How Pro does not understand economics)

But, to go through your points, McDonald's labor costs are labor costs THROUGHOUT the system, from production of the patties to their sale to a hungry customer. External costs, like overhead from gasoline, etc., may well drop, but you literally ignored all of my analysis that this drop would not correspond to the massive drop in income. Lower prices do not mean anything if wages have dropped many times more than the prices.

My opponent next talks about how prices have increased over the past fifty years, and so has the minimum wage, so AHA, he got me!

Sarcasm, obviously here, as my opponent clearly is baffled by INFLATION. This is a magical concept whereby prices rise over the long term as a natural effect of market forces [1]. Interestingly, the minimum wage was HIGHER from its inception to the 1980s, when adjusted for inflation, than it is now [2]. My opponent just does not understand economics.

II. New Point: Make the market more competitive for a higher wage!

My opponent never, ever impacts how lowering the minimum wage will make the job market more competitive for higher wages. It already is incredibly competitive to get wages above the minimum wage; all you are doing is changing the floor, not the level of competitiveness.

III. New Point: Bring Manufacturing Back to the US!

Firstly, my opponent does not warrant why this is necessarily a good thing. The US has become a service and technology company, which happen to have higher wages, on average, than manufacturing does [3].

What my opponent is advocating here is a regression of the United States economy, whereby the masses produce cheap products for the profit of multimillionaires, as we saw throughout the early 1900s. Of course, we know where that got us.

Conclusion:

My opponent concludes by saying unemployment is the problem, but does not ever impact how this is the case or why lowering the minimum wage will solve for this in any meaningful way. This is more vague argument without reason or warrant.

I apologize for the sarcasm in this round, but what my opponent is advocating is comical. The idea that anybody could POSSIBLY survive on $160 a month, when people cannot survive in the status quo with a much higher minimum wage, is absolutely nonsensical.

My opponent has provided NO actual argument as to why lowering the minimum wage this drastically will be beneficial, and has NOT actually shown that prices will decrease proportionally to wage decreases. Instead, he has simply shown that he does not understand inflation.

It's actually kind of funny that he references 1964, when, in 1964, the minimum wage relative to inflation was higher than present [see earlier source]. Pretty sure that sums up this round.

Sources:

1. http://www.forbes.com...
2. http://www.pewresearch.org...
3. http://www.forbes.com...
Debate Round No. 2
22 comments have been posted on this debate. Showing 1 through 10 records.
Posted by drewsaphor 2 years ago
drewsaphor
Maybe someday I will be a master debater.
Posted by TruthHurts 2 years ago
TruthHurts
Drewsaphor - you should definitely keep debating! The more you practice, the better you will get, just like anything else.
Posted by drewsaphor 2 years ago
drewsaphor
I need practice. Debating is new to me.
Posted by JohnMaynardKeynes 2 years ago
JohnMaynardKeynes
Haha, you did a pretty good job! :)
Posted by TruthHurts 2 years ago
TruthHurts
My defense of the minimum wage will be humbled next to that of JohnMaynardKeynes. He is excellent.
Posted by JohnMaynardKeynes 2 years ago
JohnMaynardKeynes
I challenged you. For anyone interested: http://www.debate.org...
Posted by JohnMaynardKeynes 2 years ago
JohnMaynardKeynes
Would you want to debate this same topic with me?
Posted by drewsaphor 2 years ago
drewsaphor
I should have picked something easier.
Posted by drewsaphor 2 years ago
drewsaphor
Exactly.
Posted by drewsaphor 2 years ago
drewsaphor
To my opponent. Thank you for kicking my butt. I joined this debate site to get some experience and try something I never had before. I was never good at debates, and this is a learning experience for me. Thank you.
6 votes have been placed for this debate. Showing 1 through 6 records.
Vote Placed by jackh4mm3r 2 years ago
jackh4mm3r
drewsaphorTruthHurtsTied
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Total points awarded:05 
Reasons for voting decision: I have opinions on the minimum wage similar to pro...but pro put on a lackluster debate. Con disputed pro's weak points effectively. Little else needs to be said.
Vote Placed by Conservative101 2 years ago
Conservative101
drewsaphorTruthHurtsTied
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Reasons for voting decision: Con, despite his name, showed that the truth doesn't hurt and that reducing the minimum wage won't necessarily help the economy. Con's arguments were more convincing and less speculative, while pro's arguments were mostly theories.
Vote Placed by dexterbeagle 2 years ago
dexterbeagle
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Reasons for voting decision: Pro failed to mount a substantial argument and failed to rebut most of Con?s main points. One of the difficulties was the proposition championed by Pro. Reducing wages to a fraction of their current level is a hard sale, given that wages have not maintained parity with inflation. Moreover, the subpar sourcing of Pro made the original argument weaker. However, there were possible avenues for Pro to attempt, or if at the very least evade in empirical data. Pro?s argument should have argued for his position by coming up with a formula that challenges current CPI calculations. Numbers, especially when clouded in recondite economic jargon, provide an opportunity to present information that looks real but is simply smoke-and-mirrors. Although do not try this with people anyone with basic math skills or anyone with the ability to navigate their way through a TI-83 calculator.
Vote Placed by FuzzyCatPotato 2 years ago
FuzzyCatPotato
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Reasons for voting decision: Con rebutted Pro points easily. Pro didn't cite sources but spammed them at the end.
Vote Placed by MrJosh 2 years ago
MrJosh
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Reasons for voting decision: PRO has simply not made his case, and didn't even bother trying to support his assertions.
Vote Placed by Astal3 2 years ago
Astal3
drewsaphorTruthHurtsTied
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Reasons for voting decision: Conduct- Goes to con as pro rebutted very little of cons arguments Arguments- It is no longer the 1960's, minimum wage moves with inflation not the other way around. Sources- Every source pro provided was vague and didn't directly support any of pro's arguments. This one clearly goes to con.