The Instigator
Ron-Paul
Con (against)
Winning
20 Points
The Contender
Magicr
Pro (for)
Losing
14 Points

The Minimum Wage Is a Sound Economic Policy

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Post Voting Period
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after 9 votes the winner is...
Ron-Paul
Voting Style: Open Point System: 7 Point
Started: 11/12/2012 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 6,848 times Debate No: 27095
Debate Rounds (4)
Comments (19)
Votes (9)

 

Ron-Paul

Con

You are the best, most free person available who's wanted this.

Full Resolution:

The Minimum Wage Is a Sound Economic Policy.

I will be negating this resolution.

BoP is shared.

Definitions:

The Minimum Wage: "The smallest hourly wage that an employee may be paid as mandated by federal law."[1]

Sound: "Financially strong, secure, or reliable."[2]

Economic Policy: "The actions taken by a government to influence its economy."[3]

Rules:

1. The first round is for acceptance.
2. A forfeit or concession is not allowed.
3. No semantics, trolling, or lawyering.
4. Debate resolution, definitions, rules, and structure cannot be changed without asking in the comments before you post your round 1 argument. Debate resolution, definitions, rules, and structure cannot be changed from all moments after the debate has been formalized.

Voters, in the case of the breaking of any of these rules by either debater, all seven points in voting should be given to the other person.

Debate Structure:

Round 1: Acceptance
Round 2: Presenting all arguments (no rebuttals by con)
Round 3: Refutation of opponent's arguments (no new arguments)
Round 4: Defending your original arguments and conclusion (no new arguments)

Sources:

[1]: http://www.investorwords.com...
[2]: http://dictionary.reference.com...
[3]: http://www.investorwords.com...

Magicr

Pro

Accepted.
Debate Round No. 1
Ron-Paul

Con

I would like to thank Magicr for accepting this debate.

I. Unemployment

The minimum wage drives up wage costs to employers, thus making it more prone to laying off, especially the less skilled workers like teens and minorities and low wage jobs in general.

I.a. General

Through a hypothesis, we can see generally why the minimum wage increases unemployment:

1) There exists a marginal productivity (the amount of revenue that worker brings their employer per hour of work) for workers.

2) Because companies compete with each other for workers, a worker's wage will be close to that marginal productivity. (if a worker is making significantly less than their marginal productivity, another person can make a profit by hiring them for slightly more than they're making, and so on until the wage is approximately the marginal productivity).

3) A government declaration of a 'minimum wage' doesn't raise the productivity of workers.

4) If a minimum wage is set above the marginal productivity of a worker, that worker's employer must either continue paying that worker, losing money, or fire that worker.

5) Businesses aren't charities, they will not hire workers for a loss.

6) So the minimum wage can only cause unemployment.

Statistical and empirical evidence can support this theory.

Economists have studied the job-destroying features of a higher minimum wage. Estimates of the job losses of raising the minimum wage from $4.25 to $5.15 have ranged from 625,000 to 1,000,000 lost jobs. It is important to recognize that the jobs lost are mainly entry-level jobs. By destroying entry-level jobs, a higher minimum wage harms the lifetime earnings prospects of low-skilled workers. "[1]

If you compare the average from the states (plus DC) with a minimum wage higher than the federal one to those who only obey the federal one, you get an average unemployment rate of 9.34% for the 1st group and an average of 7.88% for the 2nd group. [3][4]

This can be seen in this graph:

Minimum wage increases increase overall unemployment.

[2]

"With all of this recessions significant labor market problems, and the expensive federal efforts to offset them, it's too bad that the minimum-wage law added so many people to the list of those who today cannot find jobs."[5] As the minimum wage increases, unemployment increases. Why? Because with a minimum wage, companies have to pay more to employees. This means that they have to lay off employees to stay on budget.

I.b. Low-Skill Workers

I'll focus on teenage and young adult unemployment here.

Again, another hypothesis:

When the minimum wage kicks in and employers have to start laying off, who, by nature, are going to be laid off first? The workers they need the least or who produce the lowest marginal productivity or production at all. Why? Because their cost-to-benefit ratio (C/B) it higher than with other groups. Who does this tend to affect? The low-skilled and the people just entering the labor force (i.e. teens and young adults) because they have the highest C/B of all workers because their skill is the lowest.

Evidence can also back up this claim.

"Using data extended to 1999, they find that the effect of the minimum wage on employment has been fairly constant over time, and that there are statistically significant negative effects of the minimum wage on teenage employment, with an elasticity of −0.12 in the short-run and −0.27 in the longer-run."[6]

"A 2006 University of Georgia study found that every 10 percent increase in the minimum wage was associated with a 4.6 to 9.0 percent decline in teenage employment. This finding was corroborated last summer when the 12 percent hike in the minimum wage corresponded with a five percent unemployment spike for teens."[7]

And another graph can show this:

Minimum wage increases increase teenage unemployment.

[8]

"Unemployment in 2006 (teenage) was 4.4%, there was a steady minimum wage. In 2009, after a few minimum wage increases, teenage unemployment was 10.2%."[8] As the minimum wage increases, teenage employment decreases. Why? Because as the minimum wage eats into companies' profits, they can employ fewer people. And the first people they fire are the unskilled, young employees.

Also, "Minimum wage laws affect ethnic minorities the most."[9]

The minimum wage hurts blacks generally. [10]

A graph can show this too:



[13]

It affects minorities because of their low-skill status too.

II. Prices

Through the first hypothesis I provided above, we can deduce that employers, in addition to lowering their costs (through laying off workers), would also want to increase revenue, thus they also raise prices.

More evidence can back this up.

"The federal increase from $4.25 to $5.15 costs California families an average of $133 more per year for the goods they normally purchase. Since higher-income families spend more, they would pay more in absolute terms than lower-income families: up to $234 per year compared to $84 per year."[11]

The minimum wage increases inflationary pressure. [12]

"Artificially imposed wages, like those mandated by the government through implementation of minimum wage legislation, will cause prices to increase."[14]

As the minimum wage increases, not only do companies fire employees, they also raise prices to help the budget. And in the end, this will make it harder for people, especially poor people, to buy necessary things. That in turn reduces GDP growth because there is less buying, and this will plunge us into another recession.

Sources:

[1]: http://web.archive.org...
[2]: http://www.foxbusiness.com...
[3]: http://en.wikipedia.org...
[4]: http://en.wikipedia.org...
[5]: http://economix.blogs.nytimes.com...
[6]: http://showmeinstitute.org...
[7]: http://epionline.org...
[8]: http://www.americanthinker.com...
[9]: http://mises.org...
[10]: Behrman, Jere R.; Sickles, Robin C.; and Taubman, Paul. 1983. The Impact of Minimum Wages on the Distributions of Earnings for Major Race-Sex Groups: A Dynamic Analysis. American Economic Review, vol. 73 (September): 766-778.
[11]: http://www.ppic.org...
[12]: Adams, F. Gerard. 1987. Increasing the Minimum Wage: The Macroeconomic Impacts. Briefing Paper, Economic Policy Institute (July).
[13]: http://online.wsj.com...
[14]: http://mitch-alan.hubpages.com...;
Magicr

Pro

I would like to thank Ron-Paul for this opportunity to debate as well as all of you who are reading and will be voting it.

As agreed, I will not present rebuttals of his R2 arguments in this round, but will only build my affirmative case.

Burden of Proof

In this debate, my BoP is simply to prove that one minimum wage law enacted by the federal government is either financially strong, secure, or reliable. Con must prove that any minimum wage law enacted by the federal government is neither financially strong, secure, nor reliable.

I am not obligated to defend any raise in the minimum wage, in fact I can advocate for a lower minimum wage and still uphold my burden of proof, which is to justify the existence of a minimum wage that is financially sound.

Pro Case

Unlike Con’s long and heavily sourced case, mine is extremely simple because the economic rationale behind the existence of the minimum wage is basically common sense. As inflation rises, the cost of living will rise, but wages will not necessarily rise. This translates to a less economic activity because as workers make less money compared to how much it costs them to live, they will be less likely to spend money. Something that works against economic activity declining is certainly a sound economic policy.
Thus, it is necessary for the level of wages to be adjusted every so often in order to maintain economic growth.

That’s it. I hope the audience will appreciate my keeping this simple argument short and simple rather than overstating my case, and will not hold this fact against me.

Back to you, Con.

Debate Round No. 2
Ron-Paul

Con

I would like to thank Magicr for presenting his arguments.

Here is why the minimum wage will not boost economic growth:

The. minimum wage has a negative effect on the American economy, because:

1. Jobs will be cut.
2. Prices on everyday goods will go up.
3. Price inflation will result.
4. Interest rates will increase.
5. Fewer businesses will start.
6. Savings diminish in value.
7. Less money will be spent.
8. More jobs will be cut.
9. This goes on and on.

1.
If the cost of hiring someone increases, then companies will not be able to afford as many employees.[1][2]

2. 3.
If the cost of hiring someone increases, then companies will be forced to raise their prices to compensate. In the long run, this cancels all of the benefits of the minimum wage.
When goods cost more, the cost of everything goes up. This is called price inflation. Such inflation can weaken the economy.[3]

4.
Because banks lend money to make money, when the value of their loans decreases do to the inflation described above, they must make more money to compensate for this. They do this by increasing interest rates on loans.[4]

5.
With higher interest rates, it is harder for businesses to start, as they have to make a larger initial risk. Also, with higher interest rates, it is harder for a business to stay afloat. [5]

6.
Because interest rates will be less than the rate of inflation (banks have to make money), the stronger inflation is, the quicker the value of a savings account deteriorates.[6]

7.
When people have less savings, they spend less. Also, they feel less secure.[7]

8.
With less people spending, fewer companies can sustain themselves. Also, with less spending, the economy is weaker.[8]

9.
This really does go on. Raising the minimum wage can severely weaken an economy, and that certainly isn't what we need right now.

Another measure is to determine overall increases in GDP or an overall effect on the economy.

"In this new study, Dr. Joseph J. Sabia (United States Military Academy at West Point) uses data from the Census Bureau and the Bureau of Economic Analysis to measure the Gross Domestic Product (GDP) and employment response associated with an increase in the minimum wage. Sabia shows that increases in the minimum wage can actually have a negative effect on GDP"specifically, GDP generated by lower-skilled industries.

Sabia first examines whether increases in State and Federal minimum wages between 1997 and 2007 have decreased low-skilled employment (defined here as the employment-to-population ratio for 16-to-19 year-olds). Controlling for economic performance and other unmeasured state employment trends, Sabia finds that each 10 percent increase in a state"s minimum wage decreased employment for the group by 3.6 percent. And because these employment losses were not accompanied by an increase in school enrollment, they suggest that job loss caused by wage hikes is not offset by long-term productivity gains.

After determining that increases in states minimum wages did decrease employment, Sabia looks at data on economic growth to determine whether job loss associated with a higher minimum wage has had a negative impact on GDP; he focuses specifically on GDP generated by those industries affected most by minimum wage increases. This includes low-skilled industries like wholesale trade, manufacturing of durables, warehousing and storage, rental and leasing services, and administrative and waste services. Sabia finds that each 10 percent increase in the minimum wage is associated with a two to four percent decline in state GDP generated by these lower-skilled industries.

Broadening the analysis to examine national GDP, Sabia finds that increases in the minimum wage between 1997 and 2007 had a small, insignificant negative effect on the national economy overall. This means mandated wage increases are far from the economic "shot in the arm" advocates claim them to be."[9]

However, most of this is measuring increases in the minimum wage. Not on the elimination of it (although the above arguments are still very relevant). Here is what another study concludes:

"The effect of a minimum wage is a classic example of the law of unintended consequences. Minimum wages create unemployment: At above-market prices people want to supply more labor than employers wish to hire. Repealing the minimum wage would have two effects. First, it would create job opportunities, particularly for teenagers, and the chance to acquire experience today that can translate into higher future earnings. Second, it would send a powerful message to employers, employees and investors that they can hire and invest without fear of punishment."[10]

Logic can also conclude:

"If the owner makes $10 per hour off my work and pays me $8 per hour, then the owner makes $2 profit. If the minimum wage increases to $11 per hour, the owner loses $1 per hour by keeping me employed and will lay me off. The most productive employees will probably keep their jobs, but there will be far fewer employees to do the same amount of work.

Many people say that "owners will pay their workers $2 per hour if there isn"t a minimum wage." This is a ridiculous statement if logic is applied. You have to ask yourself, would you work for $2 per hour? Probably not. Do you know anyone that wants to work for $2 per hour? Probably not."[11]

Therefore, eliminating the minimum wage would spur economic growth.

Through my argument, readers can conclude two things:

One, that the minimum wage, harms the economy, and two, that eliminating the minimum wage would help economic growth.

Sources:

[1]: http://www.frbsf.org...
[2]: http://www.heritage.org...
[3]: http://www.onlineathens.com...
[4]: http://www.foxnews.com...
[5]: http://www.westportresources.com...
[6]: http://www.bankrate.com...
[7]: http://www.iht.com...
[8]: http://www.coloradoan.com...
[9]: http://epionline.org...
[10]: http://www.forbes.com...
[11]: http://dailyorange.com...
Magicr

Pro

In this round I will respond to Con's R2&3 arguments and defend my own case somewhat simultaneously.

A key part of Con's case is that the minimum wage (MW) increases unemployment. To support this claim, Con presented both a hypothesis containing a false premise as well as data which is some of which is interpreted fallaciously and does not actually support Con's case.

Con's hypothesis included the statement that workers' wages will likely be close to their marginal productivity because of competition for labor. While this sounds like it would be true in an economic dreamland utopia where supply and demand function perfectly and everyone has access to equal information and is subject to the same situations , reality does not necessarily work out that way.

Many, if not most people who are most affected by MW laws are unskilled workers who desperately need a job to support themselves and/or their families. If the MW were to be abolished, a business would likely lower their wages below the marginal productivity of its workers, hoping to make bigger profits for the people on top. Other businesses might also lower wages for the same reasons. Uncertainty about finding a new job would cause workers to stay with current employment even though their wages had been cut. Over time, the difference between the marginal productivity of workers and their wages would certainly increase.

If this type of situation seems fanciful, there is always history for a guide. During the industrial revolution up through the applications of the MW, workers were certainly paid extremely low wages for long hours of work. So why didn't they just leave in search of better paying employment? After all, don't businesses have to compete for these workers? Yes, they do have to compete, but if they're all paying similarly low wages, people will still be forced to work for less than their marginal productivity. A MW ensures some floor.

A large problem with much of Con's case is that he merely addressed an increase in the MW as causing problems, not the existence of the MW itself.

Con compared the state averages of those states that have MWs higher than the federal to those that only obey the federal law and found that the first group had higher unemployment. This comparison does nothing to support his case as it compares varying degrees of the MW, not with a MW and without one. More importantly, however, is the fact that just because Con can compare level of MW and unemployment does not mean that one causes the other as Con seems to assume. In fact, looking at Con's source, the level of unemployment appears to have more to do with a state's region that its MW laws.

Next, he presented a graph. His graph only shows the years 2000-2010. It should be noted that unemployment is seen to increase while the MW stays flat in the beginning of the graph, and the increase in unemployment that happens to coincide with a raise in the MW also occurred at the same time as the Great Recession.

Once again,it is fallacious to assume that MW effects unemployment.

Con next addressed teenage unemployment, claiming a correlation between a raise in the MW and teen unemployment. The problem is that his hypothesis here is based on the false assumption that the MW causes unemployment and his data to prove this point suffers from the same Post Hoc inferences as the previously addressed data. Once again, we are presented with a graph that demonstrates unemployment increasing during the recession and this is blamed on the MW.

This general claim is followed by a more specific claim regarding minorities, but once again there is no reason to believe that MW is more responsible for such things than the general state of the economy in general.

R2 is concluded by Con with the claim that prices will rise as the MW rises. Once again, this only addresses an increase, not the existence of the MW as well as drawing conclusions with the Post Hoc fallacy.

As Con went on in R3, his logic did not get any better. He continued debating whether the MW should be increased. This is exemplified in his statement: "If the cost of hiring someone increases, then companies will not be able to afford as many employees." This statement implies that I am arguing for an increase in the MW which he would argue would increase unemployment. The rest of his list continues on in this manner making reckless assumptions that are based on the previous assumptions which are incorrect or not applicable to the resolution.

Next, he presented an elaborate study, however, this too is not really applicable to the matter at hand as it discusses not whether the MW should exist, but rather the effects raising it has, as shown by the title of the study: "Failed Stimulus: Minimum Wage Increases and Their Failure to Boost Gross Domestic Product."

Con's final piece of evidence continues in this vain and does not why the MW should not exist, but rather why it should not be raised from $8 to &11. This evidence continues by saying: "Many people say that 'owners will pay their workers $2 per hour if there isn't a minimum wage.' This is a ridiculous statement if logic is applied. You have to ask yourself, would you work for $2 per hour? Probably not. Do you know anyone that wants to work for $2 per hour? Probably not."

Would someone work for $2 in today's economy? Probably not. How about $5? There's probably someone out there willing to work for that. And then wages fall a bit. And if somebody will work for $5, why not $4? And wages fall a bit more. And in a few decades we're at $2. But competition ensures that this would never happen, doesn't it? Tell that to the workers of the Industrial Revolution or the workers in the sweatshops in India and China and Taiwan. Someone is always willing to work for a little bit less.

Additionally, it should be noted that Con has not really refuted my R2 argument, which stated that a MW ensures that wages will rise as inflation rises.

In conclusion, throughout the debate, Con has merely made a rather weak case for why the MW should be lowered, not why it should be abolished, drawing on Post Hoc fallacious evidence. I have explained why a MW is necessary. I have fulfilled my BoP, Con has not.

The resolution is affirmed.



Debate Round No. 3
Ron-Paul

Con

I would like to thank Magicr for this great debate.

My opponent's claims that wages will fall is illogical. "The argument [yours] is defective. It takes it for granted that the employers pocket the difference between the marginal-productivity wage rate and the lower monopoly rate as an extra monopoly gain and do not pass it on to the consumers in the form of a reduction in prices. For if they were to reduce prices according to the drop in costs of production, they, in their capacity as entrepreneurs and sellers of the products, would derive no advantage from cutting wages. The whole gain would go to the consumers and thereby also to the wage-earners in their capacity as buyers; the entrepreneurs themselves would be benefitted only as consumers."[1]

Here is additional evidence for the Marginal Productivity theory: "There prevails a tendency for wage rates to reach the point at which they are equal to the price of the marginal product of the kind of labor in question. If wage rates drop below this point, the gain derived from the employment of every [p. 598] additional worker will increase the demand for labor and thus make wage rates rise again. If wage rates rise above this point, the loss incurred from the employment of every worker will force the employers to discharge workers. The competition of the unemployed for jobs will create a tendency for wage rates to drop."[1]

In addition, my opponent's claims about the industrial revolution are actually misguided.[2]

Therefore, wages stay close to marginal productivity because there is competition for those workers in the labor market.

Next, my opponent attacks my unemployment arguments.

Take this analogy: "Fast food restaurants employ low-skilled workers. Suppose a higher minimum wage is imposed. The restaurant then raises its prices to cover the costs. The laws of supply and demand dictate that there will be some customers who will pay the higher price, but that some others will not. The chain outlet in an upscale area may continue with only a small drop in business, however in a less affluent area business will drop more sharply. The people not buying hamburgers will bring their lunch or buy pre-packaged food from a convenience store. The outlets that are no longer profitable will be closed, or the hours reduced to prime selling periods. The net effect is that some of the employees will make more wages, but others will lose their jobs and the previous patrons of those outlets will not get hamburgers they can afford."[3]

Here is a graph showing how the minimum wage can effect unemployment:

Labor unions decrease the quantity of labor in the workforce.

[4]

Here is a better way to show the process:



[6]

Is there empirical evidence? Yes, there's more.

I am going to focus more on low-skilled workers when I post my refutation.

My opponent first claims that the correlation is false simply because of recessions. However, the trend can be traced further back:



[5]

Notice how the minimum wage is increased before the unemployment level rises. This indicates that the minimum wage does cause unemployment. Looking carefully at the graph in 1990 shows that the minimum wage was increased before the recession unemployment set in.

There is even more. There is a mountain of empirical evidence showing that the minimum wage increases unemployment [7]particularly among teenagers.[8]

Here are a few quotes: "Where most economists agree is that the higher minimum wage does not do much to relieve poverty. That is partly because many poor people would not gain (since they do not work); partly because some of the costs of higher minimum wages are shifted onto poor consumers; but mainly because many minimum-wage workers are not poor."[9]

"...minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital."[10]

Then, my opponent attacks my inflation argument, but that too can fall easily:

The natural price of a product is based on many factors and among these is labour. When the costs of labour increase, the price of its products increase as a result. When this happens market-wide (as it would with a minimum wage), it leads to this price inflation. This price inflation increases until the nominal value of labour is essentially what it was before [11].

Finally, my opponent claims that I have not really refuted his R2 argument; however, in the beginning of my R3 about how the minimum wage actually hurts the economy, I do refute it. Even so, I will expand upon it here.

A minimum wage is not necessary to ensure that the employee can recieve wages necessary to meet the cost of living.

I. Because the minimum wage law only outlaws jobs that drop below its standard [12], the employees are actually worse off than before. Being unemployed generally earns an individual less than being employed on any wage [13].

II. In addition to that, wages cannot drop below the "natural" minimum wage [14]. The "natural" minimum wage here refers to the natural minimum that an unregulated market will pay for labour. The natural minimum wage is equal to twice the subsistence of the labourer [15].

III. In addition, if workers do not make much more than what is required to subsist, they often unionize, shifting the bargaining power towards the employees [16].

Therefore, the minimum wage does not help workers or employment.

I think I have effectively proven my case, but I will take this short amount of space to clear something up. I agree with my opponent that the resolution of this debate states whether or not the minimum wage should be abolished. However, he is wrong when he says that I have not touched on its abolition; only on its increase.

I have provided enough evidence that concludes that the minimum wage both increases unemployment and prices. Take, for example, the minimum wage/unemployment correlation I posted a graph of earlier. Why can't it be inferred that greater reductions, and the eventual elimination of the minimum wage would lower unemployment further? The same goes for prices.

Here is my final point (note, this isn't a new argument). It can also be inferred from my argument that if a minimum wage of, say $2 were implemented, it would be rather unneccessary. Therefore, it can be abolished simply because it is a waste of time and resources.

I have proved that the minimum wage should be abolished as well.

BoP is shared, and I have refuted my opponent's argument and produced my own.

Thanks again to Magicr for the debate.

Sources:

[1]: http://mises.org...
[2]: http://www.fee.org...
[3]: http://factspluslogic.com...
[4]: http://mises.org...
[5]: http://www.unc.edu...
[6]: http://web.archive.org...
[7]: Mazumdar, Dipak. "The Marginal Productivity Theory of Wages and Disguised Unemployment." The Review of Economic Studies 26.3 (Jun, 1959): pp. 190–197
[8]: Brozen, Yale. "The Effect of Statutory Minimum Wage Increases on Teen-age Employment." Journal of Law and Economics, Vol. 12(April 1969): pp. 109–122
[9]: http://www.nd.edu...
[10]: http://mitpress.mit.edu...
[11]: Smith, Adam. "The Wealth of Nations": Chapter VI: Of The Component Parts Of The Price of Commodities.
[12]: http://www.investorwords.com...
[13]: Assuming that X is positive, X>0, http://dictionary.reference.com..., Definition 23
[14]: http://econlib.org...
[15]: http://econlib.org...
[16]: http://www.wisegeek.com...;
Magicr

Pro


Thank you to Ron-Paul for this intriguing debate. I’ll jump right in:


Con’s first claim is that I am assuming that businesses will pocket the difference between marginal productivity and wages. Yet, he offers no evidence that the the opposite would be the case. In fact, his argument states “For if they were to reduce prices according to the drop in costs of production, they, in their capacity as entrepreneurs and sellers of the products, would derive no advantage from cutting wages.” If, as he says, there is little gain for the business if prices were to be reduced based on the drop in cost of production, it is unlikely that a business would choose to make such a choice. It would likely choose instead to pocket at least the majority of the difference.


Next is presented another mostly irrelevant argument in which Con argues that if wages are set above the marginal productivity, then employment will decrease, however, this assumes a MW that is set above the marginal productivity of most workers.


My opponent’s attempt to discredit my argument concern the Industrial Revolution does not achieve its purpose as his source concedes that wages were low during this period. “The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them.” [1]


This supports my argument. I never claimed that factory owners forced people to work, nor did I claim that conditions were so good before the IR (another point addressed by Con’s source). My points were that the IR provides an example of a time when people were payed below their marginal productivity, and also that when only low paying jobs are available, people will end up being forced by the situation to take a low paying job. A MW means that the lowest paying jobs will at least have some decent pay associated with them.


I have demonstrated and Con has not proven that wages will necessarily remain close to marginal productivity.


Conceding the Post Hoc of his R3 evidence, in R4 Con presented several new charts to support his MW-unemployment correlation claims. His first two graphs make the previously addressed assumption that a MW would be set above marginal productivity. His third graph is not to be found on his cited source #5. I suspect that he meant to cite it as source #6 as that source reveals a picture of the graph, but provides no information on what the true source of the graph is. This means that neither I, nor the readers, have a good way of verifying the information. The graph states that it is using the real MW, but does not state for what time the MW is adjusted.


Next Con writes that there is “a mountain of empirical evidence that the minimum wage increases unemployment particularly among teenagers” and cites two studies. Although some economists have done work that would lead to such a conclusion, others disagree. A study done at the University of California concluded just the opposite [2].


Con attempts to refute my initial R2 argument with a ridiculous amount of unneeded sources such as a dictionary definition of the word positive and are based on the same unproven assumptions as the rest of his argument. I have already addressed his arguments that the MW causes unemployment and that wages will not fall without the MW.


Finally, Con states that a MW of $2 would be unnecessary, however I have already explained in the previous round that without a MW wages could gradually fall and unemployed people in desperate situations would essentially be forced into working for ridiculously low wages. An interesting point concerning this is that Newsweek conducted an experiment the results of which concluded that some Americans said they would settle to work for 25 cents an hour [3].


I have shown that the MW is economically sound and necessary for a healthy society.


Vote Pro!!


Sources:


[1]- http://www.fee.org...


[2]- http://www.irle.berkeley.edu...


[3]- http://www.thedailybeast.com...




Debate Round No. 4
19 comments have been posted on this debate. Showing 1 through 10 records.
Posted by m-theoryrules 1 year ago
m-theoryrules
Ron paul did not win.

He provided only data that correlated to his conclusion, and not any pertianate data to the contrary...for example elevated age of retirements effect on youth unemployment?

Correlation is not causation.

If minimum wage was economically detrimental...then the market would correct with a weaker currency for countries that institute this policy...however the case with many countries that use this policy is precisely the opposite...the currency value in world markets INCREASES.

Ron paul's positive data was insufficient to support his conclusion because other factors related to the correlation he wished to established were ignored even while they were pertinent.

He made a normative case for his position...which is of course a debatable one.
Posted by Loathomar 1 year ago
Loathomar
While I think Ron-Paul won the debate, I still do not agree with him. It is true that our economy loses low skilled, poorly educated jobs, this is not even the relevant part of our economy. The effect of a higher minimum wage means less low skilled, poorly educated work, means more people are forced to become better educated and more skilled to find work and the low skilled, poorly educated jobs that are lost from a higher minimum wage are replaced by automation, which drives high skilled and highly educated work and increase the productivity of the economy as a whole.
Posted by Microsuck 1 year ago
Microsuck
Full RFD in about two to three hours. Please be patient with me.
Posted by Microsuck 1 year ago
Microsuck
Full RFD in about two to three hours. Please be patient with me.
Posted by Bull_Diesel 1 year ago
Bull_Diesel
Great debate! Austrian Economics is the way to go, glad to see the vonMises links on Con's part.
Posted by thigner 1 year ago
thigner
Let's imagine the world without the minimum wage and I"m the owner of promising and already promised as one of leading company of singular industry. Employees were paid around 8 bucks (adopted on USA. in the case of Korea, it's around 4 bucks). If I have one-thousand workers I pay minimum wages ( non including those who are highly educated and designated on the white collar workers)

By descending wages as 4 bucks, my company can reduce the expenditures to around 1,500,000 dollars( I calculated minimum wage workers' wage is 30000 dollars a year) a year.

And even I decide this new policy, there is possibility of workers heading out of company.
However, simultaneously there are lots of unemployed and employable poor hierarchy there.

IS there any possible reason I must not reduce it and make profit more?
Should I care about their stability of life?

and will be any owner of company care about it?
Posted by Muted 1 year ago
Muted
Reading through. Will vote once finished.
Posted by 16kadams 1 year ago
16kadams
Following, I recently changed opinions on the issue so I'll watch this.
Posted by DeeZeeQuinn 1 year ago
DeeZeeQuinn
I would love to take this debate...
Posted by Ron-Paul 1 year ago
Ron-Paul
So many debaters.

I'll pick one of you sometime tomorrow (and I don't mean to sound like a dick).
9 votes have been placed for this debate. Showing 1 through 9 records.
Vote Placed by Microsuck 1 year ago
Microsuck
Ron-PaulMagicrTied
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Reasons for voting decision: Withdrawing my vote until I can have time to write an RFD
Vote Placed by Chicken 1 year ago
Chicken
Ron-PaulMagicrTied
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Reasons for voting decision: CVB bababa need more clarification.
Vote Placed by BA_BA_BA 1 year ago
BA_BA_BA
Ron-PaulMagicrTied
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Total points awarded:30 
Reasons for voting decision: made more sense in his arguments
Vote Placed by imabench 1 year ago
imabench
Ron-PaulMagicrTied
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Reasons for voting decision: Countering SeniorIntelligentDebater, I shall sodomize him for his crime later in accordance with DDO's new crackdown on poor voting
Vote Placed by SeniorIntelligentDebator 1 year ago
SeniorIntelligentDebator
Ron-PaulMagicrTied
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Reasons for voting decision: I agree with him.
Vote Placed by Kinesis 1 year ago
Kinesis
Ron-PaulMagicrTied
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Reasons for voting decision: Pro raised some compelling objections to Con's comprehensive and theoretically plausible case, but ultimately failed to refute the bulk of his arguments. Con sourced his arguments much more comprehensively and pro got off to a poor start. At some points I wanted to jump in on pro's side. Fairly clear win for Con.
Vote Placed by baseballkid 1 year ago
baseballkid
Ron-PaulMagicrTied
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Reasons for voting decision: I did not mean to click the vote button. I am sorry.
Vote Placed by Muted 1 year ago
Muted
Ron-PaulMagicrTied
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Reasons for voting decision: I felt that both debaters did very well on this debate. Con wins easily on the source point. The arguments were very close, Pro won by a very small margin. This is because Con's graphs, although comprehensive in a way, did not include all available data. I do not know why, but Con seems to go over the 8000 limit in quite a few debates, this one included. In R4, Con's arguments (with the url extension) has 8096 characters. This gains Pro the conduct point. S/G will be for Con, because Pro makes some slight grammatical errors. This was a very informative debate overall, and I had no trouble reading it. I gave Pro the win based on his arguments about the industrial revolution.
Vote Placed by utahjoker 1 year ago
utahjoker
Ron-PaulMagicrTied
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Reasons for voting decision: Both gave convincing argument and it came down sources and I feel that Con had a slight edge, but a very even debate.