The Instigator
tylergraham95
Pro (for)
Winning
4 Points
The Contender
Tolman8r
Con (against)
Losing
0 Points

The US Minimum wage ought to be raised substantially.

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
tylergraham95
Voting Style: Open Point System: 7 Point
Started: 1/13/2014 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 2,262 times Debate No: 43888
Debate Rounds (5)
Comments (11)
Votes (1)

 

tylergraham95

Pro

First round is acceptance only.
Second is Construction only
No new arguments or rebuttals may be made in the final round.

Forfeitting more than one round constitutes total loss.

PLEASE don't accept if you're going to forfeit.
Tolman8r

Con

I accept, and may Reason guide us!
Debate Round No. 1
tylergraham95

Pro

I thank my opponent for accepting my challenge.



PROS CASE

8 million workers live in poverty because the minimum wage is too low.(2) Only 62% of minimum wage workers are under 25, and only 25 of these workers are enrolled in school. (3)

(A) The current minimum wage does not account for inflation

The average annual inflation rate is 3%.(1) This means that, every year, money loses about 3% of its value. This means, adjusted for inflation, the minimum wage lowers by about 3 cents every year. Every year, minimum wage workers can afford less and less for their money that they are working so hard for. Because the minimum wage is not adjusted for inflation, those workers who are minimum wage earners are having to work more jobs in order to make ends meet. If the minimum wage is not adjusted for infaltion, then those working for minimum wage will move closer and closer to poverty. Raising the minimum wage, however, will help raise the overall standard of living for the US, thus helping the country.


(B) The minimum wage is (historically) quite low.

Past minimum wages (adjusted for inflation) have been lower than today, but these wages were made during a time of particularly low workers rights.

Here is a graph illustrating historical minimum wages.


As you can see, the minimum wage is relatively low, when compared to times of economic prosperity, such as the 70's (when the minimum wage was highest) in which the only economic hardship was a very brief and relatively mild recession. you can see, the minimum wage is low in both areas of the graph that constitute the great depression and great recession. 19 states already have raised their minimum wages above the federal minimum, as they can see that the current minimum is too low.


Of these states, only one is a member of the top ten poorest American states (New Mexico), and that state still has a minimum close to the federal minimum. (4) Meanwhile, Alaska, California, New jersey, Connecticut, and Massachusetts are all in the top ten.


(C) Raising the minimum wage improves the lower class and the economy.

One major benefit of raising the minimum wage is the effect that it has on the lower class and the economy. A minimum wage earner likely spends 100% of their income. This is because the money they are is just enough to make ends meet, and they therefore have none left over to save. This means that every cent that you raise the minimum wage by is returned into the economy, as minimum wage workers would still be likely to spend 100% of their income in order to make ends meet. increased consumer spending results in more money flowing in the economy, which results in the thriving of the economy. The middle class also stands to gain significant benefits from raising the minimum wage, which is illustrated in the following
"If no minimum wage workers are laid off or have their hours reduced, the minimum wage increase is simulated to yield $4.0 billion in monthly benefits." (3)


Counter-Arguments

You may be already thinking to yourself about the potential negatives of minimum wages being raised. The two most common arguments are that the cost of basic necessities will go up and that unemployment will become rampant. Well neither of theses ideas are legitimate concerns.

(D) Higher minimum wages likely do not affect employment.

When many economists were asked if they thought raising the minimum wage would negatively impact employment, this is how they responded.


As you can see, the experts are torn, many saying that it will, and many saying that it won't. Some economists even believe that raising the minimum wage would increase employment, due to increased spending. Here is a graph from Doucoullagos and Stanley (2009). Each dot represents an estimate of the effect of raising the minimum wage on labor demand. Notice that the most statistically precise results, which are positioned higher up, cluster near zero.



(E) Raising the minimum wage would not likely increase the costs of food.

Many people are afraid that raising the minimum wage would likely cause the cost of living to go up. This is probably not the case. "Sara Lemos reviewed the literature and found that most studies reviewed above found that a 10 percent US minimum wage increase raises food prices by no more than 4 percent and overall prices by no more than 0.4 percent." This means that the US government could safely raise the minimum wage without drastically increasing the cost of living.


Summary

Raising the minimum wage would be greatly beneficial for the economy of the US and for those living in poverty, and wouldn't be likely to have a large negative impact on employment, or cost of living.



VOTE PRO!







Sources
1. http://inflationdata.com...;
2. http://articles.latimes.com...
3. http://www.theatlantic.com...;
4. http://en.wikipedia.org...;
Tolman8r

Con

Tolman8r forfeited this round.
Debate Round No. 2
tylergraham95

Pro

Forward all points
Tolman8r

Con

My apologies to Pro and the readers. I won't sully the argument with excuses.

The US Minimum wag should not be substantially raised.

Economic Reasons

The reasons for this are, largely, economic. For one, as anyone who has studied basic economics knows, when you set a floor of a price, it creates a gap between supply and demand. Labor is a supply that workers create as demand for labor increases. For example, if you are offered a job at 40 hours per week at $10 per hour, you would agree to give your time as labor or search for a better offer. Employers set their demand based on the amount of labor they require to create products demanded. When demand for a product is high, demand for labor is also high to create the product, as well as the inverse.

A good example of this can be found here: https://www.boundless.com... (I'm not sure how to post graphics, I apologize.)

MOST MINIMUM WAGE WORKERS WORK FOR SMALL BUSINESS OWNERS
Labor costs are one of, if not the largest source of cost for any business. Fast Food franchises are hardly an exception, and spend between 30-35% of their costs on average on salary alone (1) Mostly, fast food "restaurants" employ minimum wage workers. These are largely franchises who pay a fee to the corporate structure to license their name and buy their food from them. They make, on average, $50k per year (2). A $1 increase per hour per unit of labor would increase the cost drastically. A Forbes article calculated that a franchise owner would lose approximately $20k per year from a $1 increase in cost (3).

THE AVERAGE MINIMUM WAGE WORKER IS NOT SOLELY RESPONSIBLE FOR HOUSEHOLD INCOME
About 3% of workers over the age of 25 make the minimum wage or less (not counting tips for tipped workers, such as servers or valet). This undoubtedly accounts for much of the lack of strong evidence of minimum wage effects on the economy as a whole.
It is also worth mentioning that those receiving Social Security benefits are capped at how much money the are allowed to make before financial penalties kick in (4).

Pro's argument will rely on data from some noted economists (Krugman et al) that purports to show no negative consequences to employment, or at best no consensus. However, a literature review conducted by Neumark and Wascher (5), shows that most analysis are borderline negative at best. True, there is no clear consensus, but, at a time of record unemployment and instability in the low-skill market, is it wise to add more instability?

Also, it must be mentioned that, while employment numbers alone may not be calculated discernibly negatively, overall economic factors, such as hours worked, raises, benefits, prices of product, etc are often negatively impacted (6). With the implementation of the Affordable Care Act (Obamacare), small business owners are already eyeing their bottom line and considering whether or not they can afford to hire. 48% in a survey said they have frozen hiring and 19% have reduced their number of employees as a direct result (7). It is important to note that many of the studies showing lack of elasticity at minimum wage levels for employment are conducted during the 1990's and mid 2000's, both times of economic expansion. When economic conditions for growth are already small or stagnant, anything that could slow the pace of growth is not necessarily a good idea.

MINIMUM WAGES DO NOT ACCURATELY REFLECT VARIANCE IN COST OF LIVING.
The cost of living varies wildly by location in the US. The most extreme examples are comparing Manhattan, NY to Harlingen, TX, the most and least expensive places to live by average cost of living. The cost is nearly triple (8). Considering the poor pay a significantly higher portion of their income on housing and utilities, it makes sense that adjustments to the cost of living should correlate to any minimum wage (9).

ANY MINIMUM WAGE SHOULD BE DONE ON THE MUNICIPAL LEVEL
As my previous point alludes to, contrary to Pro, I believe in minimum wages being set at the municipal level, based on local cost of living. If minimum wage is set to $10, it won't cover basic minimum in New York, but will be more than enough for significant disposable income in Texas. This is not a major point of my argument, but more to show my point of view.

In conclusion to opening salvo, I emphasise that, in a wildly varied economic society, national minimum wages will stifle economies in poorer areas while not contributing to economies in larger ones.

I hope voters will get past my 1st round snafu and accept my argument for what it truly is.

Vote Con

1: http://www.cbsnews.com...
2: http://work.chron.com...
3: http://www.forbes.com...
4: http://www.ssa.gov...
5: ftp://ftp.iza.org...
6: http://www2.gsu.edu...
7: http://www.cnbc.com...
8: http://money.cnn.com...
9: http://www.businessinsider.com...
Debate Round No. 3
tylergraham95

Pro

I thank my opponent for their response! The forfeit is forgiven.

Rebuttals

(1)"The reasons for this are, largely, economic. For one, as anyone who has studied basic economics knows, when you set a floor of a price, it creates a gap between supply and demand. Labor is a supply that workers create as demand for labor increases. For example, if you are offered a job at 40 hours per week at $10 per hour, you would agree to give your time as labor or search for a better offer. Employers set their demand based on the amount of labor they require to create products demanded. When demand for a product is high, demand for labor is also high to create the product, as well as the inverse."

The con fails to fully illustrate with this point how raising the minimum wage woud negatively affect the economy. That being said, I have shown in my previous round that raising the minimum wage would not significantly affect the prices of products such as food. See R1 Point E.

(2)"MOST MINIMUM WAGE WORKERS WORK FOR SMALL BUSINESS OWNERS"
"Labor costs are one of, if not the largest source of cost for any business. Fast Food franchises are hardly an exception, and spend between 30-35% of their costs on average on salary alone (1) Mostly, fast food "restaurants" employ minimum wage workers. These are largely franchises who pay a fee to the corporate structure to license their name and buy their food from them. They make, on average, $50k per year (2). A $1 increase per hour per unit of labor would increase the cost drastically. A Forbes article calculated that a franchise owner would lose approximately $20k per year from a $1 increase in cost (3)."

Owning a portion of a franchise is not a small business. It is merely a portion of a much larger business. Furthermore, although business owners may spend more money as a result of higher minimum wages, they would ultimatelay benefit due to the increased net spending that results from higher minimum wages. See R1 Point C.


(3)"Pro's argument will rely on data from some noted economists (Krugman et al) that purports to show no negative consequences to employment, or at best no consensus. However, a literature review conducted by Neumark and Wascher (5), shows that most analysis are borderline negative at best. True, there is no clear consensus, but, at a time of record unemployment and instability in the low-skill market, is it wise to add more instability?"

Con cedes there is no census as to the full impacts of raising the minimum wage. Possible economic stability is a negative that is easily outweighed by the net benefits enumerated in my R1 argument.

(4)"When economic conditions for growth are already small or stagnant, anything that could slow the pace of growth is not necessarily a good idea."

This statement is true. Raising the minimum wage, however, does not slow economic growth. A strong middle class has been show throughout history to be good for forming a strong economy. I have shown in my R1 Point C that raising the minimum wage significantly strengthens the lower and middles classes. Therefore having net benefit on the economy.

(6)"The cost of living varies wildly by location in the US. The most extreme examples are comparing Manhattan, NY to Harlingen, TX, the most and least expensive places to live by average cost of living. The cost is nearly triple (8). Considering the poor pay a significantly higher portion of their income on housing and utilities, it makes sense that adjustments to the cost of living should correlate to any minimum wage (9)."

"As my previous point alludes to, contrary to Pro, I believe in minimum wages being set at the municipal level, based on local cost of living. If minimum wage is set to $10, it won't cover basic minimum in New York, but will be more than enough for significant disposable income in Texas. This is not a major point of my argument, but more to show my point of view."

The federal minimum wages is a baseline that all states must meet. If a state has a higher cost of living than the minimum wage, then that state should raise it's minimum wage appropriately. The federal minimum will simply ensure that a certain minimum is met. Furthermore, this argument is contradictory to the rest of your argument. Many of your point argue in favor of no minimum wage, whereas this one seems to argue in favor of state minimum wages rather than federal minimum wages. Again, the federal level is just the baseline. Local governments can make it higher where necissary.


Summary
My opponent does not provide net negatives that outweigh the net benefits, and many of the problems that he has presented are actually accounted for in the raising of the minimum wage.

VOTE PRO!!!
Tolman8r

Con

The Con fails to fully illustrate... how raising the minimum wage would negatively affect the economy.

Yet Pro fails to address my point regarding the studies he points to are taken, largely, during times of economic growth (namely the 1990's and 2000's). In times where any commodity is in great demand (in this case labor), the price elasticity is as the graphs show. However, in times where the demand is below supply, price stays low or even lowers.

Owning a portion of a franchise is not a small business.

I believe Pro here misinterprets what a fast food restaurant franchisee is. I shall attempt to elaborate. A franchisee pays a licensing fee to the owner of the franchise, say McDonalds. The franchisee must then buy all of his sellable items from McDonalds, sell only the foods allowed by McDonalds, cook all according to their recipe, using their equipment and all facades and other more "personal" items are required to be reviewed by McDonalds. The Franchisee also pays an annual fee, in this case 4% for the privilege of having the brand name.
In all other facets, the franchisee is a small business owner. They set pay, hours, number of employees, health care and retirement etc. Any profit on top of the 4% is the business owners to keep. As stated above, this is typically $50k per year. Any wages are paid, directly, by the franchisee, NOT McDonalds. If this fails to qualify as a small business owner, I'm afraid my definition of "small business owner" is quite different than Con's.

Con cedes there is no census as to the full impacts of raising the minimum wage.

This is indeed true. However, Pro fails to illustrate why, if there is no consensus, it would be wise policy to change minimum wages. Pro holds to increased spending by the poor to counter negative effects on the economy. However, if wages are raised, providing that economic conditions remain stagnant, those lost profits for business owners have to come from somewhere. These can come from: raising prices; lowering hours or workers; delaying or eliminating raises to long-term employees; or loss of profit.
As my previous example stated, many small business owners and franchisees don't have a large bottom line to eliminate profit. As this level would undoubtedly eat the cost of loss of profit, it is doubtful this option would be the most common.
Also, for a franchisee to raise prices requires the acquiescence of the franchise (McDonalds). Between this acceptance, if it happens at all, and the time of the wage hike, profits will be eaten into dramatically. It must here be noted that the most common purchasers of the cheapest goods are often the poor, and the workers at places with the cheapest goods are also the poor.
If the local Dollar Store must become the Dollar-Fifty Store, it will see diminishing total sales, and people who shopped there for lower prices will either seek even lower prices elsewhere (unlikely) or merely make do with less. Either instance hurts the very people Pro says will benefit.
The unemployed who would accept a minimum wage job will be unable to if hours are cut to minimize losses. At a time when unemployment is just now starting to curve toward "normal" levels (generally accepted at about 4%), eliminating growth in the minimum wage market will hurt job creation, and can very well lead to the opposite.

The federal minimum wage is a baseline that all states must meet.

Here Pro and I have some common ground (a rarity in political debate). However, Pro does not show that the lowest portion of the country is suffering under the current minimum wage. On the contrary, the cheapest cost of living places in the country are closely in line with the current minimum. If Pro wishes to raise the absolute minimum, he will have impacts on the areas that are at the baseline minimum.

In Summary, Pro does not address the possible negatives to small business owners (franchisees) or the poor. Pro also does not show that the current minimum wage is unliveable in the cheapest areas of the country. Furthermore, Pro does not explain sufficiently how a lack of consensus among economists on the effects of raising a minimum wage is evidence that raising it would have positive or even negligible consequences.

I heartily thank Pro, however, for forgiving my forfeiture, and thank him for a good debate thus far.
Debate Round No. 4
tylergraham95

Pro

Closing Remarks


Dropped Points


There are many aspects of my argument that Con has failed to address. These points are therefore DROPPED and cannot be rebutted by con. I will enumerate those now.
-My entire point A Argument: The current minimum wage does not account for inflation
-My entire point B Argument: The current minimum wage (by historical standards) is quite low.
-Con partially adresses Point C: He claims that raising the minimum wage will hurt small business owners. He does not adress my points, though, that raising the minimum wage will help the lower and middle classes.
-Con cedes that the impact of raising the minimum wage is difficult to predict, and cannot be determined with much accuracy. Pro points out, though, that if the predictions of impact made by various econmists are graphed, then it can be seen that the vast majority and the median impact is negligable.
-Point E is DROPPED as well: Raising the minimum wage will not likely increase the costs of food.

Remember, DROPPED points CANNOT be rebutted in the final round, except with cross examination with previous arguments. Therefore, I forward these points.


Con's Case

The only real case that Con has made against the resolution is that raising the minimum wage could possibly maybe hurt the economy. His points are mostly speculation without much backing. Significant doubt is also cast over these arguments, as the pro has shown evidence to indicate that the negative impacts of raising the minimum wage are likely negligable.


Summary

Con does not provide a compelling argument against raising the minimum wage, and fails to address many of my points. Therefore, you must VOTE PRO!

Tolman8r

Con

Dropped Points by Pro:

Questionable evidence for a lack of economic strain from raising a minimum wage significantly. Pro does not address the concern that lack of solid evidence in favor of his position does not rebut inaction. Rather, Pro tries to use this uncertainty as evidence that action will not cause harm to the economy, yet provides little evidence to support his claims. Pro did not refute my assertion that statistics on labor in the 1990's and early 2000's are not equitable to our current economic system.

Pro also concedes the point of wide variance in American costs of living. Pro does not show that current minimum wages fit minimum costs of living in the cheapest areas of the country. Rather, Pro concede that a minimum wage should be a "baseline", yet does not show how the current minimum wage was does not fit that standard.

Pro does not show how businesses will either stay stable or that prices will not rise. Pro again takes lack of economists' consensus as proof of either positive or negligible effects. This is not the case, as my evidence shows.

Pro assumes a lack of clear definition of "franchisee" as not a business owner. Pro does not provide a definition that fits with actual franchise business plans. I admit possible fault for not being clear up front with exact definitions, but this does not give Pro the authority to change the definition to suit his needs.

CONCLUSION:
Pro advocates a radical change to our current financial system without showing clear evidence that, not only will such change be positive on the aggregate, but that it will not cause equal or greater harm to a fledgling economic recovery. While I must commend Pro on his demeanor, I cannot agree with the facts as presented. If you are not convinced beyond a reasonable doubt that there is no harm, and only good, to raising the minimum wage substantially, you, as I, have no choice but to vote Con.
Debate Round No. 5
11 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Finalfan 3 years ago
Finalfan
Dang it I did not vote in time. I thought pro did a better job of supporting his case. However con did make some good points. I would have to agree with con in this position. When you work at minimum wage it is either due to your low ambition or even less responsibility. If you want more money you have to put your time and efoort into doing so. Or simply adjust your spending habits. Many people who work minimum wage and complain also spend a lot of their money on useless products and often harmful products (like alcohol and other drugs) So if they want enough money to live comfortably while maintaining their addictions.. they better be motivated to make the money!
Posted by Tolman8r 3 years ago
Tolman8r
It's fine, just vote Con and we'll call it even ;)
Posted by Finalfan 3 years ago
Finalfan
o.k. my bad Tolman8r. I just recently had someone do that to me in fact I had 2 in a row (one person cancelling their profile) It appeared as though you were following a trend. My apologies for my assumption. I should not have compared you to trolls. I thought trolling was a broad concept of intently ruining something not just creating false facts. Either way.. sorry!
Posted by Tolman8r 3 years ago
Tolman8r
Finfan, I agree with you in principle, but I hope you can understand that missing an argument due to school-prep is different from manufacturing faux arguments to get under the skin of others.
Posted by Finalfan 3 years ago
Finalfan
It really sucks when you put so much effort into a debate only to have your opponent forfeit after accepting the debate! That is the same as trolling to me!!
Posted by Finalfan 3 years ago
Finalfan
I meant if we do not mold our economy from that philosophy we are doomed!
Posted by Finalfan 3 years ago
Finalfan
Putting a bandaid over an infected wound does nothing. We need a complete overhaul. A reset. If you think we live our comfortable lives without consequences.. enjoy your terrorism! As long as the "fortunate" horde the resources we are doomed. Ever watch A Beautiful Mind. Why are we not following the basic economic principle? The needs of the many outweigh the needs of the few. As soon as we mold our economy from that philosophy... We are doomed.. No minimum wage hike can solve the crisis!
Posted by makeshift8 3 years ago
makeshift8
This will cause major problems for small businesses who now days are hardly able to support themselves due to heavy competition with corporate businesses. Put that alongside taxes and bills, branching out will be out of the question. Now they have to pay their people more?! They cannot afford that kind of thing.
Posted by wrichcirw 3 years ago
wrichcirw
let's see where this goes.
Posted by tylergraham95 3 years ago
tylergraham95
@classicrobert
By at least one dollar per hour
1 votes has been placed for this debate.
Vote Placed by bsh1 3 years ago
bsh1
tylergraham95Tolman8rTied
Agreed with before the debate:--Vote Checkmark0 points
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Who had better conduct:Vote Checkmark--1 point
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Total points awarded:40 
Reasons for voting decision: ff + Con is unable to show concrete harms of minimum wage. Pro shows that it makes life hard for American families, particularly in that it has not kept up with inflation. This debate had a lot of drops--try to cover things more fully. Pro's visual displays were a great way of organizing and displaying the information. Good round.