Should the Minimum Wage increase in the United States?
This debate is about whether or not we shoul raise the minimum wage, or not. I am on the side of "Con" where I disagree about the minimum wage increasing, and my opponent will be the opposite.
1st Round: Acceptance and any needs of clarification or questions (Post in the Comment Section)
2nd Round: Opening Argument (Please Keep this Argument short!)
3rd and 4th Round: Rebuttals and any New Arguments you like to Add
5th Round: Final Rebuttals and Conclusion
1. No forfeits! If a forfeit happens, then that person who did it is disqualified and is eliminated from the debate. If the both sides forfeit the same amount of rounds, no disqualifications are made; but if one forfeits more than the oher, than whoever had more forfeits has lost.
2. Need to have sources in every argument. If anyone forgets to fulfill this request, they will need to post their sources in the next round of the deabte. Failure to do this, is a penalization within the determination of votes.
3. No harassment or anything offensive.
4. Have fun!
Minimum Wage: The lowest wage permitted by law or by a special agreement (such as one with a labor union).
Increase: Become or make greater in size, amount, intensity, or degree.
United States: The country in North America
Good luck to whoever accepts!
To begin, both me and my opponent have agreed with the definitions, with no need for questions or clarifications like I was offering in the "Structure Section". Why shouldn't the Minimum Wage be increased? To answer that, lets look at the assumed economy if it was increased. Stated under the article titled "The 'Ripple Effect' of a Minimum Wage Increase", it states that the "Ripple Effect" is the resultant of increasing the Minimum Wage. What happens is a higher minimum wage means a higher inflation rate for the economy. And inflation is defined as "A general increase in prices and fall in the purchasing value of money". Basically the idea of an increase would definitely damage the economy of the United States. As well as the "Ripple Effect" article goes further by stating the possible conflict of our country being "unfair".
Lets think about a possible situation if the Minimum Wage is increased. Lets say there was an individual who worked hard and got a job that grants 15 dollars an hour, while his friends works at a fast food joint and makes that same amount. Is it fair for an individual who works hard gets the same amount of a salary, than someone who works at a fast food joint, a job, mind you, that is destined for a teenager or young adult? No, that is not fair for these people to gain this amount of a salary for just working at a fast food joint. And technically, in 2014 the average amount of money made in the United States is 50,000 a year; like stated under "Planet Money". The yearly amount of income for a 15 dollar salary is 30,000, which stated on "Planet Money" is below the average of Americans. The exact percentage being 32.2%, which is truly a low number. So why raise the Minimum Wage if the countries population makes 50,000 a year?
Also, following the idea of Minimum Wage being "unfair", it will harm small businesses. A small business, like it's name entitles, is a business that is low key but gets consumers. Not a huge business like McDonald's or any where else, but a more local joint, and Minimum Wage will harm these businesses if increased. Stated under the article "Listen to Small Businesses: Don't Increase the Minimum Wage", they state: "Minimum wage will cut employment, reduce access to the entry-level positions that lead to better jobs, increase poverty and motivate teenagers to leave school". That's a big impact, and another individual named Mark J. Perry, a economist professor, states: " If we"re going to transfer income to low-wage workers, it"s both fundamentally unfair and politically unwise to put the entire burden of that transfer on a relatively small segment of the population (namely the owners and customers of businesses that employ a lot of low-wage workers)". Many can argue that they are small businesses and will not bring a big impact to our society, well guess again. Stated under "What Causes Small Businesses to Prosper", it states that the answer for small businesses to prosper is to mainly have less government intervention. With less intervention means more freedom, and more freedom means more money and hiring more workers.
As well as the fact that with the increase in Minimum Wage will result in unemployment. In a recent article titled "McDonald"s Announces Its Answer to $15 an Hour Minimum Wage " Touch-Screen Cashiers", it states that in Los Angeles, the Minimum Wage was increased to 15 dollars an hour. Many were happy, until McDonald's pulled this idea of making cash registers instead of hiring workers. Only few were able to keep their job, but 75% of employees were fired. Because of many requesting a minimum wage, this led to the result of having robots deal with the issue instead of hiring individuals. The article also questions "What will be next"? This thought, to me, is scary for an increase in Minimum Wage because if McDonald's did this; who doesn't say other businesses will start doing this? Small businesses will be gone, and fast food joints won't be hiring. Explain to me on how raising the Minimum Wage is good?
To conclude this argument, the increase in Minimum Wage will lead to a higher inflation rate, being unfair, and actually resulting in unemployment.
Thanks to my opponent for this debate. I'm looking forward to it.
On a quick technical point, it would be helpful if Con could link sources directly to arguments. It was a quite confusing following sources. For example, you stated:
"As well as the "Ripple Effect" article goes further by stating the possible conflict of our country being "unfair"
However, the Ripple Effect article doesn't even mention fairness. That's a different article. Also, I'm not sure what arguments source #1 and #5 are tied to.
Note that Con's definition of minimum wage is quite broad. Based on this definition, my initial position is that minimum wages should be strategically raised in certain geographic areas. If I can show that it is reasonable and desirable to do this in just one scenario, a vote for Pro is warranted. In this round, my goal is to show a viable policy for a minimum wage boost that will increase social utility overall, meaning the wage boost will help low income earners more than any net economic harm.
Note that 30 states have minimum wages above the federal minimum of 7.25$, leaving 20 at 7.25$. (1) Also, the highest state minimum wage is 10.50$ (2). Each of these 20 states should look at raising wages to a level above 7.25$ but below 10.50$, with that level determined by research done by each state. This increase would unquestionably increase social utility for those workers. However, the main reason economists give for not wanting to raise minimum wages is the impact on employment. However, if I can show that the impact will be nil or negligible, then it would certainly seem there would be a net increase in social utility.
A report produced by the Center for Economic and Policy Research in 2013 contains the following text in the executive summary:
The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage. (3)
In order to dispel any myths that there is some kind of magic going on here, the report goes on to indicate how this was possible:
The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases. (3)
I would therefore conclude that a strategic application of minimum wage increase should be implemented based on the net gain in social utility.
Per the rules, I will wait until round 3 for rebuttals.
Before beginning my argument, let me say that I will organize better for this debate. I apologize for that and will promise to do better in organization. In this round, it will be a Rebuttal Round, and any new arguments anyone wishes to propose. I also wish to give credit to my opponent for giving a new type of argument to this topic, and am excited to debate. Now, to begin!
I like to answer my opponents questions about my argument in the first round, quoted by my opponent: "Also, I'm not sure what arguments source #1 and #5 are tied to". I will say that the first article is titled "McDonald’s Announces Its Answer to $15 an Hour Minimum Wage – Touch-Screen Cashiers" (1). This article basically talk about how McDonald's were required to raise the Minimum Wage to 15 dollars an our, but came up with a different solution of firing most of the employees and replacing them with touch screen cash registers. The second article is titled: "What Causes Small Businesses to Prosper" (2), which basically talks about how small businesses need to work in order to prosper. The solution, not become Government Regulated and not be forced to raise the Minimum Wage; because it will later end their business in Bankruptcy.
Now to rebuttal against my opponents argument! My opponent begins his argument that the Minimum Wage should be increased slowly, instead of instantaneously. I will agree in a sense, but we must look at the impact if that does happen. Stated under the website "Alec", under their article "Raising the Minimum Wage: The Effects on Employment, Businesses and Consumers" (3), it states:
When the government imposes a higher minimum wage, employers face higher labor costs and are forced to respond by decreasing other production expenses. As these employers cope with the increased costs of a mandated wage raise, they often respond by cutting the jobs available to less-experienced and less-educated employees. The result is that these individuals, who already have few employment options, find it more difficult to get a job. Increasing the minimum wage benefits those who already have a job at the expense of the unemployed. However, even those workers who see an increase to their wages may not feel the full benefit of higher pay, as businesses raise prices to compensate for the increase in labor costs. In particular, food prices tend to increase when the minimum wage is increased, exacerbating the problem for those who cannot find work and offsetting gains for those who can.
As we can see, the effects of raising the Minimum Wage will put more harm towards society, than benefits; but I am not done yet, for the argument my opponent uses, I shall Rebuttal against every point within this article to my opponents statements.
It Will Decrease Employment
Stated in the one article (4), it states:
Under the basic neoclassical competitive market model—used most frequently to study the effects of the minimum wage—increasing the price of a good or service decreases demand for that good or service. In the case of wage rates, if the government increases the price of labor by raising the minimum wage, employers will demand less of it.
What this refers to is that if an employer has to increase the Minimum Wage, they will most likely refuse to not hire any more workers because of standing upon a budget. The more money they need to spend on their workers, the less they are making, and more unemployment will come of it. The article also goes further down by acrtually bringing a Rebuttal to my opponents evidence. The article states:
However, the main conclusion of more than seven decades of research is that minimum wage increases tend to reduce employment. One review by economists David Neumark and William Wascher shows that 63 percent of studies found relatively consistent evidence of negative employment effects on minimum wages. Further, 85 percent of what they deem the most reliable studies point to negative employment effects.
So most evidence gathered about the possible increase in employment if the Minimum Wage is increased, is only 37%. That is very small, and this is coming from an article with a total of 30 sources! And as we can see, it is easily said that the increase in Minimum Wage will give more unemployment, than employment. As well as it also states that Teenagers are the most impacted by this because of not being able to get a job. Why? The simple answer is that if an employer has already raised the Minimum Wage, they will need to hire less workers. Between the decision of an adult and teenager, they hire the adult because of understanding the "struggles" of being an adult. While they think the teenager will eventually find a job, but in reality; does not. So why impact our fuure generation with this idea?
Before concluding this round, I wish to provide one more argument.
Increase in Consumer Prices
Stated under the same article (4):
The costs of a minimum wage hike are often passed on to consumers in what economist Daniel Aaronson calls “price pass-through.” In a study of prices in the restaurant and fast food industry—an industry that heavily employs and serves low-wage earners—Aaronson, French and MacDonald found an increase in the minimum wage also increases the prices of food items. Using data from the Consumer Price Index (CPI) from 1995 to 1997, the economists examined 7,500 food items (usually a complete meal) from 1,000 different establishments in 88 different geographic areas. They found the increase in menu prices affected limited service restaurants the hardest. These are restaurants where most diners pay at the counter and take their food home with them. These restaurants are also more likely to employ low-wage workers and thus more likely to have their business costs rise as a result of a minimum wage increase. The study found that in these instances, almost 100 percent of the increase in labor costs is passed on to consumers in the form of higher prices.
Not only does an increase in Minimum Wage impact the workers and business, it also impacts the consumer of having to raise the prices of food. That does not seem good, or beneficial at all.
With that, I will conclude this round and curious on what my opponent says.
Sources (Numbered this Time):
MW = Minimum wage
First I will briefly counter Con's arguments from round 1:
Con's states that raising the MW will have a ripple affect of increasing inflation. However, the ripple affect has nothing to do with inflation. Rather, the idea is that the MW has upward affects on higher wages, so a MW of $7.25/hr may impact wages up to $10.88/hr. Cons own source supports this.
Con also raised concerns over issues of fairness in regards to incomes of the less productive compared to the more productive at the same wage. But, according to the ripple affect (1), MW will raise the wages of those more productive workers. Also, wages will continue to adjust as time passes according to productivity changes. So the affects of this fairness problem tend to wash out over time.
Next Con provides some income comparisons using $50,000/year as compared to a 15$/hr yearly income of $30,000/year. I don't understand this argument and also I would never propose a 15$/hr MW.
Con states that raising the MW will hurt small business by referencing an article that states:
"MW will cut employment, reduce access to the entry-level positions that lead to better jobs, increase poverty and motivate teenagers to leave school"
I will save the employment question until later. As far as the other contentions, they are highly suspect and this is just an opinion piece.
Next Con refers to a "statement by economist Mark J. Perry", who claims raising the MW is unfair to small businesses since this small group bares all the burden. (This comment actually refers to a blog post by economist Landsburg. (2)). This would come as a surprise to small business owners since 61% of them favor increasing the minimum wage:
"A striking 61 percent of small-business employers favor gradually increasing the federal minimum wage to $10.10 over two and a half years"
"Businesses rely on consumer spending, and consumer spending depends heavily on wages" (3)
Con then refers to the article "What Causes Small Businesses to Prosper" with the statement:
"the answer for small businesses to prosper is to mainly have less government intervention."
However, if you look at that article (4) it barely mentions government. Nonetheless, I agree. Businesses should generally be free to transact in the market unhampered by regulations. The MW increase is an exception and is the only exception being debated.
Con then refers to a source indicating how some McDonalds restaurants are displacing workers with touch screen terminals. But machines increase productivity and are one of the main reasons wealth increases over time. When looking at technological advances, you have to weigh those few displaced workers against the wealth improvements to all.
Con's arguments in round 3 depend on two new sources: #3 & #4. (Note that source #3 is an executive summary of #4). Con's source states:
However, the main conclusion of more than seven decades of research is that minimum wage increases tend to reduce employment. One review by economists David Neumark and William Wascher shows that 63 percent of studies found relatively consistent evidence of negative employment effects on minimum wages. Further, 85 percent of what they deem the most reliable studies point to negative employment effects.
I would like to introduce some text from the same document that occurred just prior to the above:
Earlier research examining the minimum wage’s effects on employment used time-series data and variation in the national minimum wage. The results of this research show increases to the minimum wage tend to reduce employment levels. In the 1990s, however, economists began to use the variation in state minimum wage levels to determine the effect of minimum wage increases on employment. The results of the 1990s research were more controversial; some studies had similar results to earlier research, others found no effect or even significant positive effects on employment, and others showed even stronger negative effects of increasing the minimum wage. (5)
The current debate on employment effects is focused on recent evidence, not studies from seven decades ago. For example, studies by Card & Krueger 1992 (6) showed little to no affect on employment for minimum wage increases in New Jersey.
Now lets review the positive affects of a MW increase.
The main benefit of raising the minimum wage is to help low income workers. Let's look at why it is the right time to raise the MW:
First, the level of the MW has fallen relative to both inflation and other workers. According to Heather Boushey, Executive Director and Chief Economist of the Washington Center for Equitable Growth:
The purchasing power of the minimum wage hit a high in 1968 and has declined by 23 percent since then in inflation-adjusted dollars, using the Bureau of Labor Statistics Consumer Price Index for all Urban Consumers Research Series. 1968, the minimum wage was equal to just over half (53 percent) of the average wage for production and non-supervisory workers. In 2013, the minimum wage had fallen to just over a third (36 percent) of the average wage. (8)
From this data, Heather concludes:
If the minimum wage had been indexed to inflation starting in 1968, it would currently be $9.39. And if the minimum wage were indexed to be 50 percent of the average wage, roughly where it was in 1968, it would currently be $10.08.
Second, it's clear that income inequality has become an issue. From a study by Emmanuel Saez, 2014:
"Wealth concentration has followed a U-shaped evolution over the last 100 years: It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then. The rise of wealth inequality is almost entirely due to the rise of the top 0.1% wealth share, from 7% in 1979 to 22% in 2012—a level almost as high as in 1929." (9)
I have shown that the minimum wage has lagged behind other business indicators. Additionally, raising the minimum wage has positive affects on reducing poverty. I will also refer back to my source from round 2 that shows a MW increase can be absorbed "by reductions in labor turnover, improvements in organizational efficiency and reductions in wages of higher earners" (7).
In summary, the timing is right, the negative impacts are minimal and the positive impacts are evident.
How Unfair it Truly Is
I will begin by Rebuttaling against my opponents statements. To begin, I would like to argue against how unfair the rasing of the Minimum Wage in society would be. My opponent quotes "MW will raise the wages of those more productive workers. Also, wages will continue to adjust as time passes according to productivity changes". Stated under the article "Minimum Wage Hike Unfair"(1), it states: "Instead of asking for a $1, $2 or even $3 increase, they want to double their wages without going through the steps like the rest of us had to do. With two master’s degrees, I went through step-by-step salary increases. Fast food jobs are considered starter jobs, not long-lasting careers". I ask my opponent, "How hard is it to flip burgers"? It really does not require a ton of skill, and yet these people are asking for a Minimum Wage increase, how is this fair? When, in he article, the author explained how hard he worked and recieved the benefits later on in life. Said in the article, a Fast Food Job is a starter job, not a living wage job.
Also, if we continue to talk about fairness, it actually messes up the teenagers education. In the education department, every student in high school deserves a fair chance of gaining an education. If students begin to see an increase in the Minimum Wage, they will drop out of school to work at the Fast Food Industry. Stated under the article "Raising the Minimum Wage Hurts Vulnerable Workers' Job Prospects Without Reducing Poverty"(2), it states: "Individuals between the ages of 16 and 24 accounted for 53 percent of all minimum wage-earners in 2005. When the minimum wage rises, it increases the incomes of teenagers with minimum-wage jobs, making entering the workforce more attractive. This, in turn, can be expected to cause some students to spend less time in school and more time working. While the overall number of minimum-wage jobs might decrease, if employers prefer to hire teenagers to low-skilled adults, the number of teenagers enrolled in school would drop". How is it fair for the students to be influenced and not get an education, or the schools in this situation? It isn't, because when many students drop out; the price of the school plummets down. Meaning no one benefits from the Minimum Wage increase, and shows how unfair the system is.
For the previous argument that I made about people making 50,000 a year, I would like to quote what I said. I stated: "The yearly amount of income for a 15 dollar salary is 30,000, which stated on "Planet Money" is below the average of Americans. The exact percentage being 32.2%, which is truly a low number. So why raise the Minimum Wage if the countries population makes 50,000 a year"? I am simply implying that if the high percentage of workers are making at least 50,000 dollars a year, why even raise the minimum wage?
How It Hurts Small Businesses
In my opening argument, I brought up an article that states how the Minimum Wage hurts Small Businesses. I stated "Stated under the article "Listen to Small Businesses: Don't Increase the Minimum Wage", they state: "Minimum wage will cut employment, reduce access to the entry-level positions that lead to better jobs, increase poverty and motivate teenagers to leave school". My opponent claims that this can't be a source because of it being more opinion based. To start off, this debate is opinion based with bth sides proposing an argument, and support it with facts. There is no such thing as a "true" fact because all the sources we use are all assumptions. So, I will provide more evidence to prove this quote, in which I did with the drop out rates of school already; and now with the situation of unemployment. Stated under "How Minimum Wage Increased Unemployment and Reduced Job Creation in 2013"(3), it states: "This paper uses recent data to analyze the impact of raising the minimum wage on employment among the 50 states. As shown in the following charts, the analysis finds that in 2013, a $1 increase in the minimum wage was associated with a 1.48 percentage point increase in the unemployment rate, a 0.18 percentage point decrease in the net job growth rate, a 4.67 percentage point increase in the teenage unemployment rate, and a 4.01 percentage point decrease in the teenage net job growth rate. Consequently, high state minimum wages increased unemployment by 747,700 workers and reduced job growth by 83,300 jobs". That is a lot of consequences for raising the wage, so why risk it?
Then my opponent makes a claim with the folllowing quote: "This would come as a surprise to small business owners since 61% of them favor increasing the minimum wage". In a recent article titled "Small-Business Owners Split on Raising Minimum Wage"(4), it states: "Although three in four small-business owners said they do not employ minimum-wage workers, about 49% of respondents said the federal minimum wage of $7.25 should be raised, while 49% disagreed". Currently, many are split about whether or not the Minimum Wage should or shouldn't be increased, so this argument is debatable still because it seems some do, and others don't. There will never be a "true" answer because many businesses change their minds about whether or ont the Minimum Wage should be increased.
Also in my opening statement, I stated a current situation in which the Minimum Wage was increased, but cost people their jobs. If we looked at the news currently, we can see that McDonald's laid off some workers because o having to pay more people with an increase in the Minimum Wage. My opponent responded with this argument with: "But machines increase productivity and are one of the main reasons wealth increases over time". Is it fair that people were laid off because of people complaining that the wage was to low? The reason why I bring this up is because of what can happen in the near future. If we continue to fight for an increase in wages, who doesn't say all restraunts will have this type of way of doing it? Its a scary thought, and hope to never fall into this situation; but if we continue to fight for an increase in wages, it is easily assumed businessses will begin using this method.
Round 3 Source
In the last round, my opponent Rebuttals against my statement about the one source I used last round (5). My opponent brings up a quote from within the article, but does not realize the quote after it, which was: "However, the main conclusion of more than seven decades of research is that minimum wage increases tend to reduce employment. One review by economists David Neumark and William Wascher shows that 63 percent of studies found relatively consistent evidence of negative employment effects on minimum wages. Further, 85 percent of what they deem the most reliable studies point to negative employment effects". That was the quote I used, and my opponent claims this source can't be "reliable" because of studies being done decades ago.
First off, the source was made on March 2014, like stated near the title called "The State Factor". So, it is fairly recent but if my opponent claims that the research is to "old"; then I have some information within this same article. Later on in the article, it states: "A recent study by the Heritage Foundation concluded that the current proposal before Congress to raise the federal minimum wage from $7.25 to $10.10 per hour would likely eliminate an estimated 300,000 jobs per year and lower the national gross domestic product by an average of $40 billion per year". This is fairly recent, and if my opponent claims otherwise; how is it not recent?
Low-Income workers do not Benefit
My opponent argues that with an increase in the wage, it will benefit Low-Income Workers. I will say this is false, and a belief that we all wish was true. Stated under "Raising the Minimum Wage Hurts Low-Income Workers"(6), it states: "The problem with minimum-wage increases is that they reduce access to these entry-level jobs. It is a basic tenet of economics that when the price of something rises, people buy less of it. This is as true of businesses hiring unskilled workers as it is of Americans buying household goods. Heritage economist James Sherk finds that 'two-thirds of all recent studies show that raising the minimum wage reduces jobs.' This is common sense. If someone’s labor raises earnings by $8 an hour, no employer will hire him for more than that. The business would lose money—and would soon be out of business. Raising the minimum wage to $9.80 an hour, as Senator Tom Harkin (D- IA) suggests, would price many unskilled workers out of the labor market". The evidence provided here, and in my previous arguments, show that if the Minimum Wage is increased, it will not benefit anyone at all.
To conclude, I will admit currently the idea of raising the Minimum Wage sounds great and cherishable; but we must consider the future facts about what could happen.
I have already shown that a modest MW hike would adjust naturally in the market place due to ripple affect and market adjustments. Con again talks of a MW hike that would "double their wages" but I am only advocating for a modest wage hike.
But lets look at fairness in more detail. If the MW was raised from $7.25 to $8.50, the ripple affect would affect wages up to $12.75. Because of this, there be no sharp productivity differences between workers at similar wage levels. This is exactly the fairness issue that Con is calling out. Also, is it fair that those who are earning these low wages got to that point by no fault of their own? Income is affected by many factors, but chief among them are natural ability, education opportunities and culture. (1) These are things that are extremely difficult for anyone to control. Is this fair?
Con also raises the issue that a higher MW would draw 16-24 year olds away from school and into the work force. Regarding the Neumark & Wascher study that Cons source references, I could not look at this because it's behind pay-walls. But, con's source does say this regarding the study:
"In states which require students to stay in school until they are 18, raising the minimum wage had no effect." (2)
So this problem could easily be addressed, if those schools so desired, by changing the rules. However, what about those schools that don't want to do this? Could it be that they have good reasons to allow a 16 or 17 year old to drop out of school? When I was growing up, it was not unusual for kids to drop out to help out on the farm. Those same kids often went on to be successful farmers. Who are we to say what is right or wrong?
As far as con's concern about this actually causing the price of education to plummet, this is a dubious claim. First, Con's own source indicates that a 10% MW increase only affects enrollment by 2%. Second, given the extremely high price of education would ww complain about the price of education dropping?
Con again raises the example of a 15$/hr MW being $30,000/year and states:
"So why raise the Minimum Wage if the countries population makes 50,000 a year"?
I'm still not really following the argument here. Here is the exact text from that article:
"Roughly $50,000. That's how much the median households makes in income and benefits per year. In other words, half of American households made less than $50,000 and half made more."
This obviously does not mean that everyone is making $50,000 a year. Also, this is irrelevant because I'm not advocating for a 15$/hr MW. I think a modest increase to $8.50/hr is more reasonable.
Hurts Small Business
"There is no such thing as a "true" fact because all the sources we use are all assumptions."
This is a well defined, economic issue we are debating: a finite increase of wages for a small portion of the population. Labor theory and MW hikes is a contentious subject. Surely we must give more weight to studies and debates taking place between the intellectual heavyweights in the field such as Card & Krueger and Neumark & Wascher.
Next con sources an employment study from Ben Gitis of the American Action Forum. I know con would like to say that everyone is entitled to an equally weighted claim on the subject of MW, but I disagree. The American Action Forum's purpose is to provide right-leaning policy recommendations (4). The study given here by Gitis is very simple in nature, using a high level macro formula (5) that draws simple correlations between minimum wage, education and employment. Are we really to believe that nothing else affects employment except minimum wage and education levels?
Contrast this with Card & Krueger (1993) that looked at real world minimum wage hikes at 410 fast food restaurants during specific dates in New Jersey and Pennsylvania (6). The study also notes that this was a time period of a recession, so economic strength can't explain the lack of negative employment affects. The study also notes similar seasonal employment patterns for all stores, accounts for store closings and new store growth, and eliminates stores that use tips (fast food only). They also note similarities among the sores in hours of operation, fraction of full time workers and bonus programs. The executive summary for the study states:
"We find no indication that the rise in the minimum wage reduced employment." (6)
My opponent then counters my claim that 61% of small business owners favor a MW hike with a study that shows the percentage is closer to 50%. I won't quibble over this. If you refer back to my source #7 in round 3, you will see how business must adjust to the MW hike. I'm sure some of these business owners would rather not deal with improving efficiencies or adjusting salaries across workers. That does not mean it's not a good idea.
Next my opponent claims that recent news stories have McDonalds laying off workers due to MW hikes. I won't respond to this because this is anecdotal evidence.
I would next like to respond to my opponents text under the heading "Round 3 Source" where it's implied that I messed up when I claimed some of the studies referenced in his source were dated. That is, that there are more current & relevant studies available. Let me unravel the confusion. It is true my opponents source, "The State Factor", is dated March 2014. However, that is not relevant because that source is NOT a study, but relies on references to other studies. The important text from that source is:
"However, the main conclusion of more than seven decades of research is that minimum wage increases tend to reduce employment.14 One review by economists David Neumark and William Wascher shows that 63 percent of studies found relatively consistent evidence of negative employment effects on minimum wages.15 Further, 85 percent of what they deem the most reliable studies point to negative employment effects". 16
My complaint regarding the dated nature of the "seven decades" research stands. The initial Card & Krueger NJ vs PA study was in 1993 and the debate since then has centered around looking at specific state level studies. As my opponents source states, the early studies used time-series data, meaning it was higher level aggregate data. The new studies looked at specific, real world examples. This is why the debate shifted with Card & Krueger. This is also why the "seven decades" claim carries little weight.
But what about the rest of the quote above, starting with "One review by economists David Neumark..."? This references Neumark & Waschers 2010 book "Minimum Wages", which I'm unable to get more detail on. However, if you read the statement above carefully, note the ambiguity in the text I bolded. What does "relatively consistent" even mean and how did they deem a study to be reliable? Also, critically important is how far back they looked? Was it prior to the 1993 Card & Krueger study?
My opponent then mentions a Heritage foundation study from that same source that claimed:
"the current proposal before Congress to raise the federal minimum wage from $7.25 to $10.10 per hour would likely eliminate an estimated 300,000 jobs per year"
First of all, I'm proposing that states would decide wether to raise the MW, and to no more than $8.50. Just prorating my figure at the federal level would result in 100,000 loss instead. Even if this were true, you'd have to weigh that against the benefits of increasing wages for millions. However, I have to point out again that the Heritage Foundation is a right wing policy think tank. I don't put much weight on that, but just to prove a point, here are some left-leaning Washington think tanks articles on MW hikes;
"Evidence Shows Increasing the Minimum Wage Is No Threat to Employment" (7)
"Over 600 Economists Sign Letter In Support of $10.10 Minimum Wage" (8)
"Debunking the Minimum Wage Myth: Higher Wages Will Not Reduce Jobs" (9)
My opponent next attempts to debunk my claim that raising the minimum wage will help low income workers. However, if you read the text from his source, the only claim made is that employment will be reduced. This isn't a new argument. We already debated that!
However, I will address one point about my opponents source shown here:
"Heritage economist James Sherk finds that “two-thirds of all recent studies show that raising the minimum wage reduces jobs.” (1)
The word "finds" on that page is hyperlinked and the page it takes you to doesn't even mention that.
I'm out of room, so I will wait for final round to summarize.
For this round, I will do some quick Rebuttals to my opponents arguments, and then state my conclusion.
Quoted by my opponent, he said: "If the MW was raised from $7.25 to $8.50, the ripple affect would affect wages up to $12.75. Because of this, there be no sharp productivity differences between workers at similar wage levels". I would agree with my opponent by raising the Minimum Wage slightly, but there comes the issue with people wanting more. Stated under "How Much Money Do You Really Need"(1), they say: "But the irony is that earning additional income will actually not lead to extra happiness, once you have already attained a “comfortable standard” where you have what you need to function and be content". The article goes in depth that there is no "comfort level" because when people get to that level, they don't feel "content" so they push for more money. Taking my opponents example of raising the Minimum Wage, people would accept at the time but later will argue for more money; similar to what is currently happening with a request of raising the Minimum Wage to 15 dollars an hour.
Secondly, with the whole sitation about students dropping out of school with an increase in minimum wage, there are numerous debates of how this is good or bad. I will provide facts about how students dropping out of school is bad. Stated under "Information Sheet on Dropping Out of School"(2), it states numerous reasons of why dropping out of school is bad. The big factor being "More and more entry level and trade specific jobs require a minimum of high school graduation". This is bad because we need individuals to do certain jobs within society, and not have to work at the Fast Food Industry for the rest of their lives; lik stated in my previous argument that one cannot make a living of having a fast food job for the rest of their lives. Back then, it was different and slightly easier on making a living, but nowadays; kids need to be educated to suceed at life (3).
My opponent also states: "First, Con's own source indicates that a 10% MW increase only affects enrollment by 2%. Second, given the extremely high price of education would ww complain about the price of education dropping". I will agree that it says a 10% Minimum Wage increase would affect the enrollment by 2%, but why even risk dropping that 2%? That 2% could affect something more greatly, than what is being viewed. Secondly, my opponent makes the claim of dropping education, and I will argue that, that idea is bad. Stated under "Why Quality Matters in Education(4)", it states:
We found that school quality indeed has a remarkable impact on differences in economic growth. The analysis was very straightforward. All of the available earlier international test scores were formed into a single composite measure of quality and related to differences in growth rates across countries. The basic statistical model, which included the level of income, the quantity of schooling, and population growth rates, explained a substantial portion of the variation in national economic growth rates. But the quality of the labor force as measured by math and science scores also proved extremely important: one standard deviation difference on test performance was related to a 1 percent difference in annual per capita GDP growth rates. The impact of such a difference in growth rates is very large. One percentage point higher growth—say, 2 percent versus 1 percent per year—will over a 50-year period yield incomes that are 64 percent higher
So the quality of our education affects our economy. If it does, we need this education to have quality so it benefits our society. Raising the Minimum Wage will bring the unfairness of our economy, and students; because of "convincing" people to work at fast food jobs for the rest of their life.
Hurts Small Business
In the last round, I said: "There is no such thing as a "true" fact because all the sources we use are all assumptions". My opponent replied back with "This is a well defined, economic issue we are debating: a finite increase of wages for a small portion of the population. Labor theory and MW hikes is a contentious subject. Surely we must give more weight to studies and debates taking place between the intellectual heavyweights in the field such as Card & Krueger and Neumark & Wascher". I will agree that this is an economic debate, but we must understand that both our sources will be opposite from each other. When I said there was no "true" fact, what I was implying is that there will be no "defined" answer if we will benefit or not benefit from raising the Minimum Wage. All studies we both brought are mainly assumptions on what "could" happen.
Also, in the last round, my opponent really did not Rebuttal against the argument on how it impacts small businesses. Voters, this seems to be an indication that my opponent has "dropped" this section of the debate because I did not see any Rebuttal. The only thing he really rebuttaled was the recent source that about Small Businesses being split about the Minimum Wage increase. Once more, some small businesses approve of it, and others disagree with it; but we can both agree that people will change their minds over time.
For this portion of the debate, we are both at a "toss up" for who is right or wrong; its the decision of the Voters to see who they think stood stronger with the Employment Argument. For this, I will expand on my previous argument of how the Minimum Wage increase will reduce employment. Stated under "The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers" (5), it states:
We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. Methodologically, we show that our approach identifies targeted workers more precisely than the demographic and industrial proxies used regularly in the literature. Additionally, because we identify targeted workers on a population-wide basis, our approach is relatively well suited for extrapolating to estimates of the minimum wage’s effects on aggregate employment. Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.
The research shows that as the Minimum Wage slowly increases, it will affect the amount of money a business makes and be required to pay more people, and having to make the decision of who stays and who goes. The people who go will typically be the lowest skill of the bunch because of not being "worth it". In another article (6) they confirm this study with the following statement:
Their results are striking: minimum-wage hikes hurt low-wage workers through a combination of disemployment (on average, there was a 6 percentage point decrease in the likelihood that a low-wage worker would have a job) and a higher probability of working without pay (internships), which of course not everyone can afford to do. One consequence of this disemployment effect is that the displaced workers in question never had the opportunity to gain experience that might have otherwise allowed them to increase their long-term wages. The net effect was that even taking into account the positive impact of minimum-wage legislation on the wages of those who remained employed; less-skilled workers overall saw average incomes decline through the recession years as a result of minimum-wage legislation.
This also goes favor into my previous argument that it is unfair to the people. It is unfair to people who aren't as great as others because of this Minimum Wage increase. What would be better just having a job, or not having a job at all?
For the McDonald's argument, my opponent claims that this source is not "reliable", but would like to argue that its a "prediction" of what can come. Ideas are influenced by other ideas, and if this idea of firing workers because of using a machine; other businesses will do the same pretty soon. In fact, if you look in New York, they are actually beginning to put machines up to certain locations.
Because of lack of characters, I will make one more statement before ending my argument. My opponent claims that my third source is not "reliable", but it is because of a recent date and set up full of other studies. My opponent states that one cannot do this, but you can because it follows the rule of using evidence: even if its the "center hold" of tons of studies, and is still recent based on the date and goes to even more recent studies at the bottom.
Regarding fairness, my opponent concedes that a moderate MW hike such as what I'm proposing would not cause any fairness issues. However, the concern has now turned to the "slippery slope" argument: that is, MW workers will not stop at $8.50/hr and will always want more. However, that isn't relevant to this debate, whose resolution only concerns whether the MW should rise at all.
Regarding the issue of a MW hike pushing those currently in school to drop out and work, I'll summarize my points on why I think this is a non-issue:
1) I just don't see how we can make a blanket statement that staying in school is always the "right" answer. There are many individual circumstances that come into play. That individual could simply desire to support his family in some critical way, perhaps by saving his parents from a bank repossession, or even putting food on the table. Or it could be that the MW job happens to be an entry level job in an industry that that person desires to work in anyway. In that case, where does that individual get the better education?
2) For those schools that truly believe this is an issue, they can simply change the rules to require kids to stay in school until 18. As I stated in the last round, my opponents own source showed that, in this case, the MW hike had no affect.
3) Regarding my opponents statement:
"More and more entry level and trade specific jobs require a minimum of high school graduation"
I don't think this is very relevant. The issue we are dealing with is a shift from in-school to employed, so obviously those in question were able to find jobs. Also think about the extreme case where a MW hike caused a much larger flood of students to drop out and chase the higher MW jobs, and many employers raised their standards and required high school graduation. Would that literally mean all those students would be unemployed and the jobs would go unfilled? Of course not. Both the former students and the employers would be forced to adjust. Employers would realize they must lower their standards some, while some kids would decide to go back to school. I would also add that in most cases the "high school graduate" requirement is met with a GED, which is fairly easy to get.
4) If all my points above are ruled invalid, then I will concede the small shift of resources from school to work. However, this small number pales in comparison to the much larger group that are helped by the MW hike.
Lastly on this subject, I will address my opponents statements regarding how "education affects our economy". The implication here is that the small number of drop-outs could negatively affect GDP. There are a number of issues with this theory. First, it's unclear how this is even tied to drop outs. The referenced study measured school test scores, but a drop-out doesn't take these tests! But even if we pretended that the test scores included the drop outs, this study still has a serious issues: it attempts to establish a causal link between school test scores and GDP. This is a daunting task. If you look at cons source, it recognizes this and tries to address it:
"One common concern about this type of analysis is that schooling might not be the actual cause of growth but may instead reflect other attributes of the economy that are beneficial to growth. To test this proposition, we investigated a number of other factors that might explain the relationship between the quality of education and growth, but ended up rejecting all of them" (1)
Now, to show how poorly they did in this endeavor, here is one example of this rejection:
"Nor is it just that the test measures are really a proxy for other attributes of the country, such as efficient market organizations. Among U.S. workers educated abroad, those from countries with higher math and science performance consistently performed better, thus precluding the possibility that it is simply something about the characteristics of the home country economies." (1)
Are they really saying there is no other explanation? It isn't possible that students with higher natural abilities tend to gravitate toward countries with better schools AND economies? And from this, they completely dismiss any and all market factors. This is almost comical considering the traditional factors that economists look to as causally linked to GDP: cultural work ethic, tendency to innovate, savings rates, government corruption, natural resources. None of this was accounted for in my opponents study.
Next my opponent claims I dropped arguments regarding impacts on small business. Regarding that, I'll take this opportunity to summarize all of my opponents positions in this debate:
1) reduces employment
2) reduces access to entry-level positions
3) leads to automation which leads to reduced employment
4) government intervention hurts small business
5) increased prices
6) unfair to more productive workers
7) increases poverty/does not help low income workers
8) motivates teenagers to leave school for jobs
The first three all relate to employment, which has been dealt with extensively in this debate. Indeed, employment is generally considered the number one point of contention in MW debates.
I thoroughly addressed #4 in round 3.
The remainder, #5 thru #8, are not really business impacts, so I'm not sure why my opponent thinks I dropped this argument. It's true that #5, increased prices, might reduce sales. However, this was not my opponents argument. Instead, the issue raised was the impact this had on consumers. Recall also that, in round #3, I showed how businesses can absorb these costs without increasing prices.
Perhaps my opponent's claim is that I did not rebut the argument "hurts small business". However that isn't really an argument because it doesn't provide any substance to rebut.
Regarding #5, my opponent raised the inflation issue in round 3, but in that same round, I showed how prices do not necessarily need to rise, but can be absorbed internally.
I addressed #6, fairness, extensively in all the rounds.
I addressed #7, fighting poverty, in round #3 and round #4. This point seems quite intuitive - we are after all putting more money in the hands of low income workers. However, just to cover the bases, this is one point that economists seem to agree on. Even David Neumark, whom my opponent has referenced in this debate, agrees:
"For instance, in a 2011 paper by minimum-wage opponent David Neumark, raising the minimum wage 10 percent would reduce poverty 2.9 percent (an elasticity of -0.29) for 21-44-year-old family heads or individuals." (2)
I addressed #8, school drop-outs, in round #4 and here in round #5.
My opponent also brings another study to the debate: Clemens & Wither 2014. First, I'll remind voters of the important study already discussed: Card & Krueger (1992). I also believe that Card & Krueger carries more weight because it deals with specific, real-word data. The problem I see with Clemens & Wither are that the data used is from the federal Survey of Income and Program Participation data, which is high level aggregate data. This make it more difficult to control for variables. Also of note is that the time frame of the study was 2009, smack in the middle of a major recession.
To win this debate, I only need to show that the MW should be increased at all, not that it should be raised at the federal level or to extreme levels like 15$/hr. I have addressed all of my opponents negative consequences and shown that the current MW level has fallen behind historic trends. Even if some negative consequences would persist, these consequences will be exceeded by the large number who will benefit from the increase.
Thanks for the debate SnaxAttack!