The Instigator
LaissezFaire
Con (against)
Winning
24 Points
The Contender
feverish
Pro (for)
Losing
15 Points

The Minimum Wage

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Post Voting Period
The voting period for this debate has ended.
after 7 votes the winner is...
LaissezFaire
Voting Style: Open Point System: 7 Point
Started: 4/22/2011 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 5,440 times Debate No: 15875
Debate Rounds (3)
Comments (22)
Votes (7)

 

LaissezFaire

Con

Resolution: The minimum wage is, overall, a good policy. I will be defending the position that it is, overall, a bad policy. (That is, a minimum wage having any economic effect, not a minimum wage too low to have any effect at all).

1) There exists a marginal productivity (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.



The data confirms my argument, showing that a 10% increase in the minimum wage (assuming the minimum wage is already high enough to have any effect—a 1c minimum wage would have no effects at all) causes about a 4-6% increase in unemployment [1] [2] But empirical data by itself doesn't necessarily matter—it can be affected by other things that can’t be controlled for in studies. What matters is if my argument is logically sound, and it is.

The problem people have with this argument is that they don’t accept the 2nd premise—many think that wages will be significantly lower than workers’ marginal productivity, and so a minimum wage can increase wages by decreasing profits. This is based on the idea that low-skilled workers, the ones that would be affected by the minimum wage, don’t have the bargaining power required to get higher wages like higher skilled workers do. This, however, is false. If it were true, industries that used low-skilled workers would have significantly higher rates of profit than those that don’t. Not only is this factually not the case, if it ever were the case, it would quickly change. We all know businessmen and investors are greedy—they always want to maximize their profits. And so, obviously, investors will tend to invest in the industries with the highest profit rates they can find. If these were industries employing low-skilled workers, then this additional investment would increase the demand for these workers, driving up their wages. And there would always be enough demand to do this—if a certain amount of investment wasn’t enough, then profit rates in that industry would remain high, which would attract even more investment, and so on.

[1] Richard Burkhauser, Kenneth Couch et David Wittenberg, "Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and CPS", Southern Economic Journal, 2000).

[2] http://showmeinstitute.org...

feverish

Pro

Thanks L-F.

This debate is for round two of the tournament organised by Freeman. The challenge was sparked off by a lively exchange in the forums which can be viewed here: http://www.debate.org...

I accept that as Pro, I have the burden of proving that the benefits of the minimum wage outweigh any negatives. My opponent as instigator also has a burden of proof and I will be demonstrating that a lot of his absolute statements are founded on questionable assumptions that he will need to provide evidence for.

It should also be clear that we are discussing the effects of the policy as a whole, not solely how it can affect the economy, but also the impact it has on individual lives and society as a whole. From this it is also clear that we are not just discussing the policy within the vacuum of a free market, which most of L-F's points correspond to. As Con, L-F is also arguing for abolishing existing minimum wage laws in the current mixed economy status quo.

____________

Firstly I'm going to examine my opponent's proposed syllogism.

1) While marginal productivity exists as a concept in economics and business management, the notion presented by L-F that "a" marginal productivity exists as a hard and fast value tied to each hour that each employee works is highly misleading.

Obviously other factors such as efficiency of operation and costs of materials will have a direct impact on the marginal value of what each worker produces. In many jobs that aren't involved with actual physical production, such as supervisory or marketing roles, direct marginal productivity would be impossible to pin down exactly.

Also, workers are not machines where you insert a certain amount of fuel (wages) and get a consistent output, one worker may be far more productive than another worker on the same wage. This is especially relevant to the issue of the minimum wage since better paid staff and those who feel their wages are fair are likely to be healthier, and feel more respected and more motivated, therefore being more productive. This is backed up by economic process theories of expectancy, equity and reinforcement. Edwin Locke studied this phenomena and found that higher wages increased productivity by an average of 30%[2,3]


2) Most of L-F's post outside his 6 steps consists of pre-empting criticism of this point, so I'll include my rebuttal to that here as well.

Companies do have to compete financially for highly skilled workers but those are not the people affected by MW. L-F provides no evidence that a worker's wage will be close to marginal productivity, which as we have seen is not a fixed amount.

There are obviously large pools of unemployed people looking for work (whether there would be in a free market fairy land is irrelevant) so employees can increase their profits by paying them far less than the marginal value of their productivity and people desperate to work do not have the bargaining power of workers whose skills are in demand.

How do examples such as £800 shoes produced by workers being paid £2 an hour fit in with L-F's assertion that it is not possible for there to be a significant gulf between wage and product value. [4] Bear in mind that this example concerns immigrant workers in Italy and that there are far more extreme examples of sweatshops in places like China that are harder to verify figures for but which clearly exist. [5]

L-F claims that this cannot be the case because if it were such industries would be significantly more profitable than others. This completely ignores very obvious factors such as technology and efficiency. Under-paying people is not the only way to increase profits, but it is an easy way for unscrupulous businesses to do so.

3) While the government declaration may not raise the productivity of workers, wage increases can. See the point about the motivating value of monetary incentives under 1.

4)
I think the notion of a minimum wage being set above marginal productivity is unrealistic. I think any efficient and well-run business should be able to get enough productivity from a decent employee to justify at least the minimum wage.

5)
This is essentially a strawman as nobody is suggesting that businesses should behave like charities. As mentioned above, it is entirely possible that supervisory, management and promotional staff could well be bringing far less actual value to a company than the wage they take home. The inverse is also true across the range of pay and skills.

Rather than fire workers they could cut costs elsewhere (perhaps in management pay packets) or give the worker more responsibilities.

6)
This is an entirely illogical conclusion to a sequence of flawed premises. Even if it could be argued that the minimum wage could possibly cause unemployment, this is far from the "only" effect it can have. The obvious improvement in individual standard of living is the most obvious and significant example of an increase in wages, the positive effects on productivity are discussed above and the wider impacts on society can be estimated by happiness indexes etc. [6,7]

_________

Now onto the evidence L-F provides in support of his case.

[L-F's 1] I'm unable to view this source as there is no online link but L-F seems to dismiss it as insignificant anyway, acknowledging that such data can be highly misleading. [L-F's 2] is a piece of anti minimum wage propaganda from a thinktank headed by CEOs and the like who clearly have a vested interest in abolishing minimum wage laws. They make a lot of the points L-F makes, but it should be noted that their overall tone is far more cautious about the accuracy of their conclusions than my opponent is about his absolute statements. "most economists say..." "minimum wage may cause..." "it is possible that..." Con is trying to use these weasel words to verify things he states as fact.
__________

L-F claims that the minimum wage causes unemployment but many statistics would seem to contradict this. For example, those US states with no minimum wage law such as Mississippi, Georgia and Tennessee have some of the highest unemployment rates [8,9] Card and Krueger found minimal negative effects of even substantial minimum wage increases [10]

Abolishing a minimum wage that had any economic impact would directly affect many workers by lowering their wages, because as L-F has acknowledged "We all know businessmen and investors are greedy—they always want to maximize their profits". These profound negative implications of abolishing the minimum wage need to be justified by my opponent.

Without a minimum wage, employers are free to exploit the desperate and needy in inhumane ways and it is clear that they will do so if given the opportunity as modern examples like sweatshops and historic ones like Slavery demonstrate.

My opponent's misguided analysis makes too many assumptions and ignores too many details, but I'll hand back over for him to defend it now.

Thank you.

[1] http://american-business.org...
[2] http://www.nbrii.com...
[3] http://www.questia.com...
[4] http://www.mirror.co.uk...
[5] http://www.laborrights.org...
[6] http://www.iim-edu.org...
[7] http://www.nationmultimedia.com...
[8] http://en.wikipedia.org...
[9] http://en.wikipedia.org...
[10] http://www.ibookdb.net...
Debate Round No. 1
LaissezFaire

Con

1. Contrary to Pro’s claims, I never said that there is a fixed, hard and fast marginal productivity for each worker, or that other factors, such as efficiency or cost of materials, do not affect the output of workers. I merely claim that the labor of workers produces some amount of value for their employers. It can vary from job to job, depending on type of job, capital (machines and such, not capital as in money), and many other factors. It doesn’t matter whether a worker’s marginal productivity varies, all that matters is that the worker’s labor brings some value to the employer.

In addition, Pro misrepresents his own source regarding wages and productivity. He claims that Locke’s research showed that higher wages increased productivity. What his source actually says is that when offered financial incentives for higher productivity, workers worked harder and were more productive. [1] So higher wages followed productivity, not the other way around—which helps prove my point.

2. Pro fails to refute my argument about the profitability of industries employing low-wage workers. I do not ignore factors such as technology and efficiency. If an industry is more efficient and advanced than others, and that makes its average profits higher, then investors will invest in that industry too. That doesn’t refute my point that if unskilled workers were paid significantly below their marginal productivity, industries employing those workers would be very profitable, and they would therefore attract investors, increasing the demand for unskilled workers, raising wages, and thus decreasing the profitability of those industries to the common level among a country. If they aren’t more profitable than other industries, then an artificial wage increase decreasing their profits would have the reverse affect, driving investors away from those industries, and reducing the demand for unskilled workers.

Pro’s example of workers being paid $2 an hour to make $800 shoes in no way disproves my claim that workers are paid close to their marginal productivity. $800 shoes do not cost that much because there’s 40x more physical labor put into them than $20 shoes, they’re more expensive because of superior materials and design. Because it is those things that make the shoes worth that much more, it is those things that have the high marginal productivity in that situation.

3. Again, Pro misunderstood his source from part 1, so this point fails. In addition, even if it were the other way around, and wage increases did lead to productivity increases, that wouldn’t prove the minimum wage works, unless you first assume that the minimum wage increases wages, which is what Pro is trying to prove.

4. And I find the idea that a minimum wage won’t be set above marginal productivity unrealistic, as there are so many different workers with so many different marginal productivities. It will surely be set below the marginal productivity of many, who thus won’t be affected by it, but it is certainly set above the marginal productivity of many others. Pro then asserts that he thinks any well-run business should be able to get enough productivity from their workers to justify paying them at least minimum wage. As I don’t see how Pro could possibly know this, and he provides no support for this opinion, this point should be disregarded.

5.While it may be true that businesses could fire supervisory and managerial staff, rather than low-wage workers, there’s no reason to think they will. Even if it were the case that those people are greatly overpaid, business owners obviously believe that they’re worth the money. Even if they aren’t (which I think is probably not true—a business owner is much more likely to understand his business and his employees than someone who doesn’t know anything about the business, like my opponent), the fact that business owners think they are means that they won’t fire them first. Just as Pro claims we aren’t working within the framework of my perfectly free-market ideal, we also aren’t working in Pro’s socialist utopia either—we’re talking about the world as it currently is.

6. Contrary to Pro’s claim, 6 does logically follow from the premises. If the premises are correct, then they show that a minimum wage set below marginal productivity does nothing, and one set above it unemploys the workers it affects—thus, the only affect a minimum wage can have is to cause unemployment.

Empirical Evidence:

Pro seems to misunderstand the state-by-state minimum wage map. While it is true that there is no state minimum wage law in the states he mentioned, they still have to obey the federal minimum wage law—a proper comparison would be green states from the map (higher than the federal minimum wage) to all of the blue, red, and yellow states (because states with no minimum wage, one lower than the federal one, or one equal to the federal one will all have the same minimum wage law—the federal one). 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 (according to Pro’s sources). [2] [3]


Pro then cites the famous Card and Krueger study, which has been widely discredited by serious economists for its lack of statistical rigor. They used telephone surveys to measure unemployment, rather than actual payroll data—and when others looked at the same data set, but with all of the data, rather than just telephone surveys, they found that Card and Krueger’s findings were wrong, and the minimum wage increase did increase unemployment in the area they studied. [4] [5]

There is a mountain of empirical evidence showing that the minimum wage increases unemployment [6] [7] [8], particularly among teenagers [9] [10] [11]. Pro has also failed to provide any actual evidence that a minimum wage increases wages.

[1] http://www.nbrii.com...

[2] http://en.wikipedia.org...

[3] http://en.wikipedia.org...

[4] Neumark, David and William Wascher, "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Reevaluation Using Payroll Records." American Economic Review, Vol. 90, No. 5 (December), pp. 1362–96.

[5] http://epionline.org...

[6] "Recent Department of Labor Studies of Minimum Wage Effects." George Macesich; Charles T. Stewart, Jr. Southern Economic Journal V26, N4 (Apr., 1960), pp. 281–290 http://www.jstor.org...

[7] "The Marginal Productivity Theory of Wages and Disguised Unemployment." Dipak Mazumdar The Review of Economic Studies V26 N3 (Jun., 1959), pp. 190–197

[8] The Economics of Minimum Wage Legislation." George J. Stigler The American Economic ReviewV36 N3 (Jun., 1946), pp. 358–365 http://www.jstor.org...

[9] "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model." Ronald G. Ehrenberg; Alan J. Marcus The Journal of Human Resources V17 N1 (Winter, 1982), pp. 39–58 http://www.jstor.org...

[10] "Teenage Employment Effects of State Minimum Wages." Arnold Katz The Journal of Human ResourcesV8 N2 (Spring, 1973), pp. 250–256

[11] Brozen, Yale. 1969. "The Effect of Statutory Minimum Wage Increases on Teen-age Employment." Journal of Law and Economics, vol. 12 (April): 109–122

feverish

Pro

Before going any further it should be noted by the judges that so far all of my opponent's arguments have involved perceived problems with introducing minimum wage laws or with increasing the minimum amount. All these arguments are essentially red herrings. Since Con acknowledges that we are addressing the status quo, where MW laws already exist in most civilised countries and since I am not arguing for increasing the minimum wage, none of these arguments even affect the resolution. I do however believe that the severely flawed assumptions they are based on need to be addressed, so I will of course continue to counter them.

1. With L-F's admission of the many variables affecting the marginal productivity of an employee his entire case falls apart. It is clear that businesses have other options besides laying off staff if they have to increase wages due to MW laws.

Increases in efficiency can pretty much always be made in any operation and by increasing the workload and responsibility of workers accordingly, businesses will still be able to get value from their employees. There's nothing necessarily wrong with firing one worker who is not productive enough and replacing them with someone more productive either. Those companies with the defeatist attitude to lay off workers and reduce production in response to having to pay their staff a liveable wage don't deserve to stay in business.

Con dismisses all the weight of evidence that higher wages increase productivity on a bizarre technicality. I'd like to know what the difference is between "higher wages increased productivity" and "when offered financial incentives for higher productivity, workers worked harder and were more productive". Wages are financial incentives that aren't given until work is done.

My opponent has entirely ignored the argument that economic process theories show the value of higher wages as a motivator. This is a well studied area in theory and in practice and businesses can really benefit by investing more in their lowest tier of employees. [1]

2. L-F doesn't address the central point that at the lowest level of the job market, people are desperately competing for jobs and businesses don't have to compete to get staff to do unskilled jobs. This is an example of monopsonistic competition. He was indeed ignoring "factors such as technology and efficiency" in his first round.

Just because it can be highly profitable to employ a lot of unskilled workers doesn't mean that other industries can't be just as profitable. For instance a company developing a new technological product may end up having much higher profits but will require greater long term investment for less initial return. Another business may be able to get quick profits employing kids to stitch garments for peanuts but be less sustainable and profitable long term. Different investors will want to invest in different kinds of ventures and thankfully, not all businessmen are unscrupulous enough to want to ruthlessly exploit their staff.

L-F's response to the example of the Italian shoes is a wonderful demonstration of the entirely arbitrary nature of marginal productivity and the frankly farcical notion that its value is set by anyone other than the employer. It is the fashion house that decides that drawing a picture of a shoe is worth hundreds of thousands of pounds but actually making the damn thing is worth just �2 an hour.

This employer could easily afford to triple the pay of their factory staff without significantly affecting the fortune paid to the designer, the quality of the few inches of cow hide used to make it or the price paid by the fools who buy these ludicrously inflated products in attempts to make others envy them.

3. Again Con attempts to dismiss the relevance of the evidence from Locke with the supposed semantic distinction between "financial incentives" and "higher wages". Remember here that the evidence is merely statistical reference for the basic economic process theory that L-F has declined to address.

The fact is that in an area where MW is introduced, the wages of any workers who previously had lower wages will go up, this is what L-F has been arguing will affect businesses. Companies will be able to adjust the way they do business to make the most out of their better motivated staff and have far more incentive to do this than to lay off workers and decrease production.

4. Again here L-F tries to present marginal productivity as an inherent fixed value of an employee when he has already conceded that it is entirely dependent on the conditions set up and the value of the product assigned by the employer.

The margins can always be re-drawn in a viable business model, like in the Italian shoe example above. If a self-employed individual is looking to start taking on employees then they better have enough capital or funds coming in to pay them a typical minimum wage (really not very much) otherwise they don't have a viable and sustainable enough business to be employing people, the same is true of large scale investors.

5. Strawman here, I never mentioned firing supervisory staff. I have maintained that there is generally no need to fire anybody but that thinking of reducing supervisory and managerial pay to more equable levels and cutting the costs of abstract investments such as marketing are good ways for employers to handle any wage increase they need to make to lower paid staff.

Since "we're talking about the world as it currently is" all my opponent's arguments are entirely void as basic MW laws are already in place and I'm not arguing for increasing them or introducing new ones.

6. The invalidity of the premises as well as the other effects of MW discussed make L-F's conclusion entirely baseless, however much he repeats it.
_____

It is Con who has a fundamental misunderstanding of US state v federal MW laws. He seems to think that state levels below the fed level are entirely meaningless and that every kind of work is subject to the federal law. However there are numerous exceptions to the federal minimum wage, from small businesses, to tipped staff, sub contracted employees etc. [2,3] So in states with no local wage laws like the ones with very high unemployment rates that I mentioned last round, there is no minimum wage for a lot of jobs. Con's counterpoint shows slightly higher rates of unemployment for states with the highest MW, but as I'm not arguing for a high level MW, this is a red herring.

Con is correct in stating that the Card and Krueger study has been controversial and many economists sought to discredit it. However there are in fact many "serious" economists who continue to endorse this study [4,5] and argue in favour of MW. Polls show that economists are fairly evenly split on this issue. [6]

Con closes his round with a collection of sources, none of which he actually refers to the content of. It's worth pointing out that there is always scope for having separate MW levels for younger people, but if he wants me to address any of this evidence directly then he should make clear arguments based on it. In the meantime, I can source bomb too. [7-10]

Thank you.

[1] http://business.in.com...
[2] http://en.wikipedia.org...
[3] http://en.wikipedia.org...
[4] http://www.epi.org...
[5] http://www2.gsb.columbia.edu...
[6] http://en.wikipedia.org...
[7] http://www.investmentsense.co.uk...
[8] http://www.huffingtonpost.com...
[9] http://www.ncccusa.org...
[10] http://amforumbacklog.blogspot.com...
Debate Round No. 2
LaissezFaire

Con


Before I go any further, I’d like to point out to the judges that what Pro claimed at the beginning of his previous round is completely false. The resolution I am attempting to prove is that the minimum wage is, overall, a bad policy—evidence and arguments showing that the effects of introducing it or increasing have been negative are completely on topic, and not at all “red herrings.” My burden of proof is to show that the minimum wage is, overall, a bad policy, and Pro’s is to show that it is, overall, a good policy. It doesn’t matter at all what the status quo is—if the resolution was something about abolishing an existing minimum wage where it exists, or introducing one where it doesn’t, then it would, but that isn’t the resolution.


1. Here, Pro argues that businesses have other options besides firing workers after the introduction of a minimum wage, such as finding ways to increase efficiency. This, of course, begs the question of why these businesses wouldn’t have done these things to increase efficiency already.


Pro says that my rebuttal to his evidence regarding the relationship between wages and productivity is a “bizarre technicality.” While I think it is perfectly clear what I meant, and obvious that what I said is no technicality, I will elaborate. Pro claimed that higher wages lead to more productivity. To quote him, “This is especially relevant to the issue of the minimum wage since better paid staff and those who feel their wages are fair are likely to be healthier, and feel more respected and more motivated, therefore being more productive. This is backed up by economic process theories of expectancy, equity and reinforcement. Edwin Locke studied this phenomena and found that higher wages increased productivity by an average of 30%” Reading this, it would seem that the evidence shows that first, wages were increased, and then, because workers were healthier, more respected, and motivated, productivity increased. But that isn’t what the evidence in his sources said at all. What it actually said is that when offered financial incentives for higher productivity, workers became more productive (that is, something along the lines of ‘if you produce 10% more you’ll get $1 more per hour in wages’). [1] This difference is not a mere “technicality,” it is extremely significant. If my opponent’s representation of the evidence was accurate, it would mean that we could introduce a minimum wage, then because workers would be paid more, and thus be healthier, more respected, and more motivated, they’d be more productive. But the evidence does not show that—it only shows that workers will be more productive if the financial incentives are tied to a prior increase in productivity, which, of course, a minimum wage does not do.


2. Pro argues that businesses don’t have to compete for unskilled labor, so that competition won’t raise wages they way it does in skilled labor markets. This, of course, begs the question of why that is. Such a situation simply doesn’t make any sense given Pro’s worldview—if businessmen want profits, and there’s this huge pool of unskilled labor available at low wages, they why don’t they simply hire them at those wages, and make a profit? The only way to explain the fact that this doesn’t happen is that there’s something standing between the businessmen and these workers—mainly, minimum wage laws.


Pro then fails to understand the way prices are determined. He says that, “the fashion house that decides that drawing a picture of a shoe is worth hundreds of thousands of dollars, but actually making the damn thing is only worth $2 an hour.” This makes no sense. If it were really up to the fashion house, then why would they pay designers such a high amount, rather than keeping the money for themselves? The reason a design is worth hundreds of thousands of dollars is because of the forces of supply AND demand, not just one. Consumers are just willing to pay much more for well-designed shoes than for poorly designed ones, so they, not the fashion houses, are what make a shoe designers work valuable.


3. Again, refer to 1. (and the source itself [1], if you wish) for my explanation of why Pro’s analysis of his source is wrong.


4. Pro again tries to argue that the fact that the marginal productivity of workers isn’t fixed, and can depend on many variables, proves his point. But unless the minimum wage changes these variables, this is irrelevant. And it doesn’t—see 1. for why Pro’s own evidence fails to show what he thinks it does.


5. Perhaps reducing supervisory and managerial pay would be a good business decision—I don’t know. But it doesn’t matter, what matters is that employers do think that these supervisors are worth as much as they pay them (as reflected by the fact that they pay them that much, rather than less). Given this, there is no reason to think that employers would actually act the way Pro wishes them to act.


6. I must have misunderstood Pro’s argument here—I was responding to his statement that my argument is “entirely illogical,” which I read as ‘logically unsound,’ thinking he was saying that my conclusion did not logically follow from my premises, not that my premises were incorrect. Refer to 1-5 for why my premises are indeed correct.



Empirical Evidence:


Pro is correct that I did not realize that the federal minimum wage does not apply to “compan[ies] having revenue of less than $500,000 per year while not engaging in any interstate commerce.” [2] (Although he is wrong that it does not apply to tipped employees—hourly wages can be below minimum wage, but hourly wages plus tips must be at least minimum wage). [2] As I have no way of finding out how significant these types of employees are to the unskilled labor market in the US, this evidence remains inconclusive, Pro’s examples of several states with high unemployment rates with no context or control for other variables nonwithstanding.


Card and Krueger: Here, Pro conveniently forgets to address my main criticism of the Card and Krueger study, which was not that serious economists don’t accept it, or that most economists don’t accept it (although I do think that anyone who takes their study seriously cannot call themselves a serious economist, that wasn’t the point of my argument). My main argument was that their study lacked statistical rigor—they relied on phone surveys to gather employment data, rather than looking at the full data set. [3] And when other economists studied the same data set Card and Krueger were studying, but used the actual payroll data, rather than surveys, they found that the minimum wage did increase unemployment in the area they studied. [4]


While I did not go into much detail about the sources at the end of my previous round, I did not say “nothing” about them. I provided 6 academic studies from respected economic journals that all found that the minimum wage increased unemployment—compared to my opponent’s empirical evidence, which is a deeply flawed study (flaws which he failed to address at all, unless he plans on doing so in his final round), anecdotal evidence from a couple of states without any compounding variables controlled for, and a “source” bomb, consisting of 1) a short piece consisting of two people’s opinions on the subject, one saying there should be a higher minimum wage and one saying there shouldn’t, with no analysis or data on either side 2) a Huffington Post (lol) piece that also didn’t have any data, and 3+4) anecdotes about a few business owners that supported a higher minimum wage, again, with no supporting data or evidence.



[1] http://bit.ly...


[2] http://bit.ly...


[3] http://bit.ly...


[4] Neumark, David and William Wascher, "The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Reevaluation Using Payroll Records." American Economic Review, Vol. 90, No. 5 (December), pp. 1362–96.


feverish

Pro

Thanks LaissezFaire.

See my uncontested opening to round 1, as well as my opponent's clarification in round 2 that "we're talking about the world as it currently is" for confirmation that the resolution refers to the status quo. I am arguing that the minimum wage is overall a good policy now, not calling for it to be increased. I stated this at the outset and L-F only denied it in the final round.

1. Con questions why businesses wouldn't already be running operations at maximum efficiency. Maximum efficiency is of course unattainable. Unless products can be made instantly with no effort, there are always slight improvements that can be made towards an ideal of efficiency applied in gradual and constantly evolving increments. This is best illustrated by the Japanese business philosophy of Kaizen. [1]

As already argued, those business owners that employ workers for the lowest wages are likely to be those who have short-term profits in mind and aren't running long-term sustainable business models. MW forces such companies to invest more in their lowest paid employees, and they are certain to get motivational benefits from doing so.

Con continues to focus on the Locke evidence and has completely ignored the theoretical foundation behind this argument. His description of the Locke experiment is entirely accurate, but in no way negates the important point that Locke found financial incentives to be the most effective motivator in employment by far. Increased wages are a financial incentive. MW can create more competition for low paid jobs because with higher wages the jobs become more desirable, this also motivates employees more.

Con continues to ignore process theory as well as the link I provided last round about the benefits that higher wages, promotion opportunities and other motivational investment in bottom end staff bring to businesses.

2. A lot of my argumentation is ignored here, Con returns to his position that unemployment only exists because of minimum wage. This makes little sense as within this point we are discussing the implementation of MW laws. Con's reasoning is that without MW, someone would always employ someone to do something. This is a bare assertion and an unjustified expectation. It's also proven categorically false by the fact that those US states where people can be employed for jobs at any wage frequently have some of the highest rates of unemployment for the whole US.

With the shoe example, Con argues that the value of the design is set by the consumer rather than the fashion house. This ignores the fact that in most cases the head of the fashion house is the designer. Consumers who buy inflated designer products may claim they do so for style, it is clear however that they do so for status. It is the ludicrous prices of these garments that make them so attractive to a certain kind of consumer. They are purchased by people who want to wear their wealth in a way that is visible to others. Studies using identical products with different labels have shown that brands influence consumer's perception of price but not of quality. [2]

3. Con again dismisses the actual arguments and the theory that supports them with his focus on the technicalities of the Locke study. The relevant issue with the study was that it showed money to be the most effective motivator on performance. He seems to have dropped his argument about whether the minimum wage can raise wages.

4. The point about the variable nature of marginal productivity here is not just that the minimum wage itself can increase employee motivation (it can, as supported by a great deal of basic economic theory and other sources I've provided, as well as the Locke study L-F disputes the significance of). The wider point is that L-F presents employers as having only the option of firing people when he has effectively conceded that there are many other options available to them.

5. Con now claims "it doesn't matter" if employees have other options besides firing staff, when it has been the foundation of his argument that they don't. It is irrelevant whether employees would actually behave as I or anyone else might wish them too. The point is that they do have other options, contrary to the bare assertions of Con's premises which state that MW laws lead automatically to unemployment.

6. Con has indeed misunderstood my argument here.

The conclusion that MW laws will lead to unemployment is void because of the flaws in the premises.

The conclusion that MW laws can "only" cause unemployment would be an illogical one even if the premises were accurate.

L-F has given no response to the other affects of MW I've talked about, the positive impacts on individuals with better pay, the economic investment these workers will put back into the economy by spending their new disposable income and the benefits to society as a whole that come from having happier, more productive workers.

_______

Con now acknowledges that many job aren't covered by federal minimum wage laws, and that in some states (including the three with exceptionally high levels of unemployment that I pointed out before) no minimum wage at all applies to some workers. Regarding the distinction with tipped employees, the point is that the employer does not have to pay the minimum wage, which means none of L-F's arguments can apply. All Con has left to say about this example is that it is inconclusive. One thing it does prove conclusively however is that Con's conclusions about unemployment always resulting from MW laws (see 2) are entirely false.

I have entirely accepted that the Card and Krueger study was a controversial one but also demonstrated that Con's attempt to portray a huge consensus against it is inaccurate. Just as the initial study attracted criticism from the likes of Neumark and Wescher, so their attempts to re-conduct it have drawn criticism from elsewhere.

There's been a fair amount of confusion and dispute about the evidence and sources presented in this debate which I'll attempt to summarise now.

Con has presented 2 sources that I've been unable to comment on at all, as I've no access to the books and there doesn't seem to be a copy available online. His other round 1 source I dismissed due to its obvious bias (a report commissioned by a business pressure group), as well as the contrast between the ambiguous claims of the article and my opponent's bald assertions. Con did not rebut this dismissal.

He presented several examples which focussed specifically on the affects of MW on teenagers, a complete straw man, since I advocate MW laws which, like those in the UK have lower levels for younger employees. Of those studies that did seem on the surface to support some of his arguments, he made no reference to any specific examples to back up any of his individual points.

Of the sources I've presented, Con has stubbornly disputed the evidence of the Locke study, a semantic issue for the voters to decide. He has completely ignored all of my links (and the arguments they supported) explaining basic principles of economic theory, along with the other ignored one noted above.

The evidence about state employment rates he misinterpreted because he didn't understand the employment laws of his country. I think my links to statements by employers in big and small businesses who do support MW are entirely relevant since all L-F's points have been about the problems faced by businesses. Economists can study the theory but it is the businessmen who have to put it into practice.

_____

This debate has led me to research this topic in depth for the first time and most of what I've learned has confirmed my previously held convictions.

Thanks to my opponent for the opportunity to debate and thanks also to judges, voters and readers.

[1] http://en.wikipedia.org...
[2] http://ctr.sagepub.com...

Debate Round No. 3
22 comments have been posted on this debate. Showing 1 through 10 records.
Posted by LaissezFaire 3 years ago
LaissezFaire
Kenyon has one too: http://www.debate.org...
Posted by LaissezFaire 3 years ago
LaissezFaire
If you're looking for a debate topic with Grape, you should look through this: http://www.debate.org... I'm sure you'll find plenty of things you disagree with.
Posted by feverish 3 years ago
feverish
Thanks for the clarification Cirro, apologies for implying you were biased.

@LF: Yeah maybe in the future but there's a few other ancaps here I'd like to debate too, such as Kenyon, Grape and possibly Sieben if I can stomach it. Thanks though.
Posted by CiRrK 3 years ago
CiRrK
Since I was requested to explain my vote (since apparently its biased) I will. Alright so I highlighted two arguments why I voted Con.

1. Implied Turn - Locke Evidence. Now, for all of those who dont do competitive debate a turn refers to an argument which doesnt show that an argument is simply wrong, but that the argument actually proves the opposite of the opponents premise. So for the Locke evidence LF makes the argument that the study actually shows that improving X leads to improving Y. Feverish had this phenomena reversed. As such, in my mind the argument is turned because without a minimum wage a business can offer more incentives (since it isnt mandated and can be done when appropriate) which would THEN increase productivity. At this point LF is winning a productivity advantage.

2. Marginal Productivity Argument. It was clear from the beginning that the marginal productivity argument would lead to a net employment loss due to the fact of loss of capital. The main arguments extended till the end by feverish to mitigate this argument were (1) other options and (2) competition for unskilled labor. But as LF points out 1 doesnt really make a case; it just makes us ask if those methods have been done already and (2) [another turn] the reason the huge pool isnt being utilized is BECAUSE of minimum wage laws.

*3* And then I mentioned about minimal extended offense. And I do realize I get ahead of myself using debate jargon. Offense means arguments which compel a vote for ones position and not simply against your opposition. And on my mind, by the end of the round Feverish had lost most of his offense and was simply using defensive (simply trying to refute your opposition to win) arguments. So I dont feel compelled to keep the status quo when Con clearly won 2 turns (which ends up being offensive argumentation).

Hope that cleared things up.
Posted by LaissezFaire 3 years ago
LaissezFaire
Or perhaps a debate on property rights. I've been meaning to do one on that for a while.
Posted by LaissezFaire 3 years ago
LaissezFaire
Well done to you too, I hope we can debate again some time. How about the labor theory of value, do you support that (with me supporting the subjective theory of value)?

Also, Cirrk agreed with you on this issue before the debate--did his blinkers go on so much that he forgot what he believed? And his and Roy's RFD's were essentially the same as Freeman's, (They all thought you didn't prove the minimum wage helped workers, although Freeman said so directly, and Cirrk and Roy implied that that's what they thought by saying I had better arguments. They all thought you misrepresented the Locke evidence. And they all thought I had better empirical support, although Freeman said more about that than Roy or Cirrk). Are you sure you don't have your anti-conservative blinkers on when reading RFD's by conservatives? But if you really don't like the RFD's, I'm sure Cirrk at least would be willing to give a more detailed one if you asked him--he did when theSkeptic complained before.
Posted by feverish 3 years ago
feverish
Wow, didn't realise the voting period was up so soon, too bad more people didn't vote.

Well done Laissez-faire, you are a great debater and deserve to do well in the tournament. Personally whatever the scoreline, I regard this debate as a win for me though as I think I demonstrated that your opening argument doesn't stand up at all.

At the risk of pulling a Sieben, I think cirro and roy's rfds are bs, claiming I "didn't understand" and "misinterpreted analytics" rather than considering the arguments from my side at all. I guess a lot of conservatives are bound to have blinkers on when they see a socialist debating anything to do with economics. Freeman's rfd was pretty fair. The legitimacy of the tourney is definitely at risk from lack of voting though.
Posted by LaissezFaire 3 years ago
LaissezFaire
The 7 point thing is for a debate tournament--tournament judges are supposed to vote all 7 points.
Posted by nonentity 3 years ago
nonentity
It's too bad the people who voted for feverish didn't give all 7 points.
Posted by Freeman 3 years ago
Freeman
This was such a hard debate to vote on, especially since I'm just learning about some of these arguments for the first time. Nevertheless, I thought two points throughout the debate were crucial.

"Without a minimum wage, employers are free to exploit the desperate and needy in inhumane ways and it is clear that they will do so if given the opportunity as modern examples like sweatshops and historic ones like Slavery demonstrate." --- feverish

I simply wasn't convinced that this was true. To the best of my knowledge, I didn't even see an argument to justify that. If that was being established from prior premises in the debate, I failed to see any connection.

"If my opponent's representation of the evidence was accurate, it would mean that we could introduce a minimum wage, then because workers would be paid more, and thus be healthier, more respected, and more motivated, they'd be more productive. But the evidence does not show that—it only shows that workers will be more productive if the financial incentives are tied to a prior increase in productivity, which, of course, a minimum wage does not do." --- LaissezFaire

The evidence (and argument) for this view gave Con a slight advantage.

Aside from that, it all comes down to how much weight one gives this economic model vs. that economic model -- this set of empirical data vs. that set of empirical data etc. To be specific, I gave con the slight edge with respect to the Card and Krueger study. I don't feel that it was strong (or rather, uncontroversial) enough to demonstrate Pro's position.
7 votes have been placed for this debate. Showing 1 through 7 records.
Vote Placed by Freeman 3 years ago
Freeman
LaissezFairefeverishTied
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Total points awarded:70 
Reasons for voting decision: Judge: 7 points - RFD in comments
Vote Placed by SuperRobotWars 3 years ago
SuperRobotWars
LaissezFairefeverishTied
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Reasons for voting decision: Pro used better sources, and his arguments seemed more sensible to me.
Vote Placed by nonentity 3 years ago
nonentity
LaissezFairefeverishTied
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Reasons for voting decision: Not a vote-bomb---going by what RoyLatham said about having to give all 7 points to the person I felt won the debate. Unless someone can point it out to me, I fail to see where Con has shown his proposed scenario to be true, and better than, the minimum wage scenario.
Vote Placed by BennyW 3 years ago
BennyW
LaissezFairefeverishTied
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Reasons for voting decision: Both sides had pretty good arguments but con was better
Vote Placed by CiRrK 3 years ago
CiRrK
LaissezFairefeverishTied
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Reasons for voting decision: Pretty easy decision. Con won both the analytics and the empirics. The two arguments i voted off of was (1) the implied turn on the Locke evidence, and (2) the marginal productivity argument. Con provided minimal offense which didnt go extended in the round at all, and from the beginning misinterpreted Pro's analytics.
Vote Placed by RoyLatham 3 years ago
RoyLatham
LaissezFairefeverishTied
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Reasons for voting decision: Both sides argued clearly, but I thought Con won by a good margin. Pro confused cause and effect with the productivity argument, and did not understand he basic economics of marginal utility. The data, in any case, clearly supports Con. this is a debat ein tournament that requires I give 7 points to the winner. Otherwise, args and sources to Con, the rest tied.
Vote Placed by andyh 3 years ago
andyh
LaissezFairefeverishTied
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Reasons for voting decision: An extremely close debate, with both sides bringing up some strong arguments. Pro just tips the balance for me though - but well done to both.