The Instigator
TheYoungNerd
Pro (for)
The Contender
Lieric
Con (against)

Should the minimum wages be repealed ?

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Debate Round Forfeited
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Voting Style: Open Point System: 7 Point
Started: 1/2/2018 Category: Economics
Updated: 2 weeks ago Status: Debating Period
Viewed: 307 times Debate No: 106310
Debate Rounds (3)
Comments (5)
Votes (0)

 

TheYoungNerd

Pro

I think that Minimum wages should be abolished because against popular belief the minimum wage doesn;t gurantee jobs and it actually makes the employment worse as the minimum wage rises, the enterpreneurs of the buisness will need to make more income as the price of the employee will rise, so the incentives will make the enterpreneurs to fire employees and decrease quality in order to make profits. Also, having the minimum wage removes the competitiveness of a job in any sector. Now, a employee would get 10 dollars no matter their skill.
Lieric

Con

First of all, nothing really 100% guarantees a job for anyone. Secondly, to consider the impacts of raised wages (implement of minimum wage), we must incorporate the idea of inflation. As you have mentioned, minimum wage causes firms who pay employees less than the minimum wage would experience lower revenue due to the obligations imposed upon them, this would inevitably cause firms to make a desicion, whether that may be to make workers redundant or to raise prices. It is more likely for firms to raise prices as firms undoubted do not want to decrease potential output except in extreme times such as a recession. This would cause inflation and push the wages for employees higher if we assume people were homo economicus and asks for higher wage due inflation, it would as well generate more revenue for firms in nominal terms. I see that is a win win situation. It helps people to buy imports from other countries. If the firms should make workers redundant, they must pay for them to leave, that could be a disaster. Not only that, assume that some workers were made redundant, productivity would decrease as well as quality (as you have claimed, assuming that is true), this would lower revenue for the firms. The firms would be absurd if they have done that, therefore they would all ways, except in extreme times, raise the price and not "fire" people (although making workers redundant is the correct term).

Finally, do you really believe that minimum wage would have such an impact insofar as the financing sector would be impacted? They earn way more than the minimum wage. I see that the minimum wage would only impact low skilled jobs such as the manufacturing sector.

This minimum wage stops firms from exploiting workers. It also does not remove the competitiveness of jobs as there are always jobs that offers wages higher than their current job. If they wish to compete then they will work harder. If they do better, they will be paid more as people, hence, the incentive.
Debate Round No. 1
TheYoungNerd

Pro

One of the most princcipal arguments for the minimum wage during the 1900's was that it gurantees the jobs and employment opportunities for people. And because of that, the minimum wage passed in USA in 1938. And, in Febuaury 14, 1987, there was an article that stated I quote,"There was a general consensus among economists that the age of minimum wages has passed away." And the minimum wages does affect the many sectors of the economy. Even if it is in low-skill employements like the manafacturing industry it is still a vital part of the economy. It is 8.8% of the US economy alone with 12 million workers.And that is just one sector.. When there is minimum wage, employees do not need to work that hard as the they need to. And don't you think so that the raising of prices will affect the market and the economy. It is a drag on the economy. It will lead to unemployment and higher prices.Some companies have way less manpower than other companies and then they need to raise their prices higher. And if the company needs new members, it can't hire because their profits wil not be enough and even if employee is perfect for the job and is willing to even to be paid lower than the minimum wage. Even if humans are not Homo Econmicus, they still behave and react to incentives. And the incentives show the enterpreneurs to raise the prices and to make shorter workdays or to fire them. While the government can force business owners to work more hours but not per week. So, they will cut workdays and will therfore earn leass money which means less purchasing power which will mean less income for the country.It is just a vicious cycle. Also, one thing to note is that many workers or applicants of any industry are new and that have no experience cannot get jobs. Other policies like Enterprise Investent Scheme and reducing bussiness taxes improves the environment in which business can prosper.
Lieric

Con

First of all, I will not elaborate and argue on irrelevant information such as certain policies or incentives. If you would have cared to pay attention, as I have said before, I do recognise that minimum wage does not guarantee jobs. However I disagree to it worsening the unemployment rates. Can you please elaborate on how you think that it worsens employment? As I have mentioned before, it would have a disastrous effect on firms if they made workers redundant compared to purely raising the prices of their goods/services. Therefore owners would not make workers redundant but to just raise prices.

Yes, when there is minimum wage, workers do not have to work as hard. However it depends on the leadership style of the owners. Strategies can be used to make them work harder. Also, if they deemed to be lazy, then employers can reasonably sack workers without violating the law. This style is called fear. This provides the incentives for workers to work hard and even harder if they wish to have a wage rise.

There is a severe flaw in your logic. Inflation (raise of average prices) would not cause unemployment. It indicates businesses prospering. There is more revenue for firms because their goods/services are sold in higher price and so an increase of unemployment would not happen. It would however decrease unemployment due to more revenue to spend. Workers would so get higher wages if we assume they are rational beings, they would ask for higher wages due to inflation. This would benefit the economy. However if inflation is exorbitant, then government will intervene.

The final bit of your argument is even stranger. Governments can"t force business owners to work longer hours. They don"t even have to work if they want to. Finally, how is an increase of price a drag on for the economy? It is the opposite! Businesses have more revenue to hire people and GDP increases due to trades of more value. Consumption would also increase due to higher income as previously explained.
Debate Round No. 2
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Debate Round No. 3
5 comments have been posted on this debate. Showing 1 through 5 records.
Posted by Lieric 2 weeks ago
Lieric
Keeping the minimum wage at the same level important improverishes people gradually due to inflation. The government should adjust it according to inflation, disinflation and deflation.
Posted by kyrmanly 2 weeks ago
kyrmanly
I think that we should keep the minimum wage flat and stable at $7.50
Posted by dpark3526 2 weeks ago
dpark3526
Minimum wage, in my opinion, is indeed a bad idea. As it would do more harm than good.
Posted by Lieric 2 weeks ago
Lieric
Next time can you please increase the word limit......
Posted by stschiffman 2 weeks ago
stschiffman
I agree with pro. Minimum wage is a novel idea, but in practice, it's done way more harm than good. All it's done is increase the cost of goods sold and inflation, both of which harm the consumer.
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