The Instigator
Jifpop09
Pro (for)
Losing
0 Points
The Contender
whiteflame
Con (against)
Winning
28 Points

The US should establish Progressive Wage Laws

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Post Voting Period
The voting period for this debate has ended.
after 4 votes the winner is...
whiteflame
Voting Style: Judge Point System: Select Winner
Started: 4/23/2014 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 4,758 times Debate No: 53239
Debate Rounds (3)
Comments (107)
Votes (4)

 

Jifpop09

Pro

Alright, this is an entirely new proposal based off of several already proposed wage reforms to the minimum. With that said, I'll try my best to explain it this round.

Basically, they are left wing laws, that decide the wage of a company based on their....

1. Employees (Third Factor)

2. Capital (Liquid)

3. Income (Revenue Margins)

4. Benefits (Employee/Employer Agreement)

For example, a rich company with high income, will have to pay a higher wage, like Walmart. While a poorer company with less capital and income, with much more employees, would pay a lower wage.

The core of progressive wage laws, is that companies will pay wages based on their ability to do so. This action, makes sure that the small buissness survives while the large one's pay a higher due.

In addition, if a small buissness like Eddie's car wash decides to give vacation days, then the employees can take those in a omit of additional wages. The choice is up to the employee and employer.

The filings over who will pay what will be handled by a seperate new beauracracy, or the IRS.

Anyways, I've had 7 people already tell me this is a good idea, so please give feedback in the comments. First round is acceptance. You may not make arguments that the wage should stay the same.

A wage floor and ceiling would exist. For the debate purpose, we will set the rates between 10.10$ and 15$.

*Ask to accept in comments

*RFD's may have a one comment extension.
whiteflame

Con

Thanks to jifpop for inviting me to debate this topic. It's certainly innovative, nice to think outside of the box.

Just to make this clear, we are arguing a policy that currently doesn't exist and hasn't been tried anywhere. As such, many of our arguments are likely going to be either unsourced (though those should be well-warranted), or sources that respond to systems with similar aspects in some way, though they are few and difficult to find.

In order to simplify this debate and focus on the topic of a progressive wage rather than a minimum wage, I will not be defending status quo, but rather that the minimum wage should just be increased to $10.10. Both of our policies will be federal, but they will apply broadly to the states as well.

I'll start on burdens. On a basic level, my burden in this debate is to showcase how a progressive wage is harmful, whereas Pro's burden is to support it. However, given the innovative nature of this proposal, the BOP is higher on Pro. A progressive wage has never been implemented here or anywhere, and as Pro doesn't suggest that we should have a trial period on a state level, we should be concerned with implementation across the country and its impacts. Untested policies such as this simply cannot be implemented unless the benefits far outweigh the harms, especially since this is going countrywide. As such, Pro has the BOP to prove that there are highly significant benefits to such a plan, and that the harms are insignificant or highly unlikely.

So let's talk policy. This plan is somewhat similar to a progressive tax, where a person making more has to pay more in taxation, so much of the harms I'll be discussing mirror harms in that system. However, as these are on the level of corporations, the harms scenarios become much larger and more daunting.

Let's talk subterfuge

On a very basic level, companies are interested in reducing their bottom line. They don't want to pay more in costs than their competitors, and as such, will do what they can in order to reduce their tax burdens. This has led to any number of accounting schemes that shift their tax burden into, say, capital gains in order to avoid paying the majority of their usual taxes. Even with the hike last year, the number of ways to avoid paying those taxes has just gone up.[1] On the company level, with accountants carefully placing every number on their balance sheets, the number of methods is likely larger.

Companies are using loopholes such as sending their finances offshore so often that the U.S. is losing $300 billion in tax revenues a year.[2] That problem is no simple one to fix either, since multilateral solutions are required. Despite anti-avoidance laws being crafted by individual nations, there's little they can do to stop these practices of offshoring.[3]

Focusing more directly on Pro's plan, there are many places they could utilize to reduce the amount they have to pay their employees to the lowest level available. The employee factor (the Third Factor), wasn't clear to me when I saw it, but I've taken the time to read into it. It's essentially an opportunity factor, which means that companies are evaluated based on how many of those under their employment can improve how much they earn based on the work they do. One way to game this system is to focus on hiring independent contractors, who are paid by the task and therefore can have more changes to their pay structure more easily for a given company than changing an employees set number of hours or a set salary.[4] As such, this encourages more contract employment to avoid the costs.

Note that the capital that would be assessed is solely liquid. Companies could easily offshore most of their liquid capital, or convert it into something illiquid, thereby avoiding these costs. More on that shortly.

Income margins have created a number of issues with employees being paid under the table.[5] The process of payment to executives will just get more devious.

Remember, Pro is not advocating any changes to the current taxation systems. As such, this system will be plagued by the same loopholes and concerns that the current one is. However, these are mainly just mitigation, reasons why they won't be paying out quite as much as they should. Why should we care as long as they're still paying out more than a small company?

Because more harms come with these practices.

These companies are going to start sending jobs overseas if they feel that that can affect the Third Factor and the benefits issue by reducing their overall employee count in the U.S. Even if they just hire here, they could easily try to game the system, ensuring that many opportunities exist for raising one's wages within the company, but that those opportunities are going to be as low as possible in order to avoid paying too much. Thus, raises for good work will happen, but they'll actually be much smaller than in status quo.

I mentioned that companies will engage in duplicitous financial practices. So long as they're doing this, it's going to affect us in a broader context. Their taxation burdens will likely decrease, reducing U.S. tax revenue. What that leads to is uncertain, but we can expect effects on infrastructure and social programs, both of which are going to mainly harm the poor. Stock holders will be put into a more precarious situation as they will have even less basis for understanding and evaluating companies, especially since the propensity for lawsuits will likely increase as a result of IRS enforcement. These stock holders are less likely to invest due to the higher risk.

And speaking on lawsuits, those are likely to increase dramatically. The IRS will sue more companies, many companies will sue the IRS to lower their minimum wage (since it's based on a variety of somewhat subjective factors), stock holders will sue companies for deceitful practices, employees will sue companies for that as well, and so on. This is a lot of money and time spent in civil courts, which means court clog as well, but more importantly, it's going to lead to massive scandals that cause major downswings in company earnings due to bad publicity. That harms employees too. Companies have shown a willingness to risk this before, they'll double down with this policy.

The risk isn't just increased here. Companies are now directly incentivized to keep as little liquid capital on hand as possible. Whether it takes converting it to other resources or sending it overseas (as they have done in large part due to uncertainties over taxes [7]), this is going to disappear from their balance sheets, and as such their access to it will decline. Companies need liquid capital, especially in the absence of certain credit. They need it for acquisitions, tax changes, and any number of possible hits they could take.[7] Reducing this means that the impetus for mergers and acquisitions would be reduced, but more importantly, companies will simply be placed into high risk situations where they are entirely dependent upon foreign accounts and credit to survive major economic fluctuations. Future recessions and depressions will therefore bankrupt more companies/

I've run out of space, so I'll get to the rest of my arguments next round. For now, I hand the debate to Pro to build his case and rebut mine.

1. http://www.forbes.com...
2. http://rt.com...
3. http://www.economist.com...
4. http://www.tranlf.com...
5. http://www.irs.gov...
6. http://www.nytimes.com...
7. https://www.stlouisfed.org...
Debate Round No. 1
Jifpop09

Pro

Baseline Argument One: Why a flat wage increase doesn't work

I'll sort of be playing devils advocate here, but I honestly feel that many of these concerns remain unaddressed by the status quo reform. Here are a couple key points to remember, when questioning yourself, if a set wage will work.

(1) Raising the minimum wage, in economic theory, seeks to increase the wallets of the lower class, so they will have more money to put back into the economy. This sounds great, but perhaps a greatest flaw, is also the most evident. As wages increase, so do the prices of big macs, groceries, and basic goods and services.

This is detrimental to the economy as a whole, as companies rely on low prices to make a profit. By increasing the wage, the lower class has to actually spend more on the services and goods they need. Negating the base purpose.

Both sides of the spectrum try to play a inflation ploy on this topic. A theory that the overall price of the dollar will just increase as a result. This is only true though, if other areas in the private sector increase contingently with minimum wage markets. Several huge problems with this argument though. Sadly, I have to give this argument to the right, simply by realist perspective. [1]

Inflation increases the power of the 1%, and if people are right (which I don't think they are), will go against half of the goals the left is pushing for.

(2)
Of course I have to make the small business argument. A major concern with setting a flat increase, is that it will strangle the life out of places with narrow profit margins. I never heard a half convincing argument disproving this.

I often hear "Only a third of minimum wage employees are employed by small business" from my fellow liberals. I'm sorry though, but it is simply a fallacious argumnent. That third is still immensely important to the economy, and their survival is neccesary. The truth is, that many companies have extremely narrow margins for profit. [2]

Some restaurants, after paying their employees their hourly dues, are left with barely 10$ an hour themselves. I want the audience to pay specific attention to this graph, and ask themselves, how many more would go out of business?



http://www.restaurantowner.com...

If this doesn't make since yet, basically we our asking are small time diner, to distribute 15$ among employees evenly. How much do tiny diners make? Probably not much over a 100$. The point is, that flat wages will outright kill the oppurtunity of growthamong small business, if not destroying it entirely. [3]

(3) Quite a simple argument actually. As small business is forced to pay more, they can afford less employees. A few weak studies have been cited against this, mainly being growth in employment among big business. Base equation....




http://tunnelwall.blogspot.com...

This argument is even weaker then point two though. Of course big business keeps hiring. Thats always been a trend, regardless of minimum wage. Unfortunately though, the small private sector is firing. Small business is needed to outweigh the pains that having a corporate monopoly will bring. [4]




Baseline Argument Two: How Progressive Wages Solve the Issues

A progressive wage, is actually designed to avoid most of the issues we have with the status quo reform. Where we can actually stimulate the lower class, while decentiving price increases from "To big to fail corporations". My reasoning is here, but note, that each point is connected to baseline one....

(1)
A theory exists that has been floating around prestigious colleges for a while now.The belief that the government can create an artificial deficit that will actually help the economy. In fact, the theory has already been proven.

Have you ever been to a small town video store, and found that the products there are also found in big chains? And if so, have you noticed that the prices at the small town store are marked up much higher then the chain video store? This is because of a huge capital deficit existing between corporations and mom and pop shops. Look at this chart. As big business profits rise, small businesses remain flat.

sales_small.bmp

http://www.businessweek.com...

Small business can not realistically compete with chains, unless they mark up prices signifigantly. By placing an artificial deficit, we can easily turn the tables. By having small time business paying 10$ wages, and big business paying 14$ wages, we create the reverse effect. Now, big business can't raise their prices, or else small business will become much cheaper in prices.

In simple terms, we would be evening and stabalizing the price of our cheetos nation wide, creating greater economic equality, and providing a solution to status quo reform rebuttal one. [5]

(2/3) The immediately evident reason for progressive wage laws. By keeping rates low for small business, then we can keep them thriving, and big business paying proper dues. Since this should be clear already, I wont dive much deeper. Just ask yourselves, which of these is better...

- A high deficit between the rich and poor?

- A 3$ deficit between the lower classes?

If you choose option 2, then your getting the picture behind progressive wages.



http://www.chicagotribune.com...

Rebuttals

Note: I will leave some rebuttals for next round, as space is low. These are not being dropped. Also, Con has brought up two paragraphs about the employee third factor. He misunderstood what it meant, so these points will be disregarded. This is not an excuse for any slanted voting. The number of employees actually decrease the payable wage.

On a very basic level, companies are interested in reducing their bottom line. They don't want to pay more in costs than their competitors, and as such, will do what they can in order to reduce their tax burdens. This has led to any number of accounting schemes that shift their tax burden into, say, capital gains in order to avoid paying the majority of their usual taxes.

Me and Whiteflame came into some confusion over PM about the capital factor. We clarified it in the comments. It includes capital gains, assets, and everything besides tied up stock. Just putting this here, so people aren't confused. I apologize for not being more specific.
----------------------------------------------------------------------------------------
Now, I feel it neccesary to sum up most of his arguments with this. His entire argument, relies on the belief that a increase in minimum wage, will outweigh the bottom line of investments. I find this argument incredibly weak, as no such proof does exist. This lacks proof and I don't see the logic.

Contrary to the opinion of my opponent, you can not simply start tying money into investments as easily as he makes it seem. Investments cost money, are risky, and require upkeep. He was vague on everything from capital gains to outsourcing. These are not simply realistic, and I hope he realies that most minimum wage employees aren't outsourced. I doubt we have ever outsourced a car wash of burger king employee to libya, but who knows.

The jist of it is that all these problems exist evidently under the status quo reform. My reform just protects small business in the process. Thanks for the debate Con!

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

[2] http://www.baynews9.com...

[3] http://nypost.com...

[4] http://www.businessweek.com...

[5] http://www-siepr.stanford.edu...


whiteflame

Con

1) Inflation

To start, raising prices reduces the amount of business they get from customers, based on a basic model of supply and demand. That's not to say that it doesn't happen, just that it's unlikely to be large. Studies that evaluate the actual impact of hikes on prices see a maximum of 2.16%, with most companies increasing prices by below 0.4%.[1] Small businesses can afford to pass on the costs without closing.

But if you're buying this point, then Pro is biting it harder than I am. It's causing more inflation among larger companies, which have products that distribute to a much larger customer base and therefore affect a broader population. And since they are often the only game in town, they have little to lose by raising prices in some parts of the country, meaning they're much more likely to pass on those costs to the consumer.

He's also biting the harm to small businesses. It's possible that, on the four factors, some small businesses will be forced to pay higher amounts in minimum wage, and they won't have the finances to defend themselves in court or to engage in duplicitous accounting practices. Since Pro is already planning on increasing the minimum wage to the same height I am, and since some small businesses may be forced to pay more, Pro is uniquely increasing the chance of their closure.

This also affects their employment. Though I would say that there's a lot of disagreement among economists on this,[2] Pro is biting the harms harder than I am for the same reasons as inflation.

2) Artificial deficit

This is really his core argument, and what he has to win in order to win this debate. The rest of his points are nonunique, and actually harm his own case, so unless he wins this, his case has more harms than mine.

And on this, he's simply not doing enough to explain how it will work. Pro admits from the outset that this is a theory, and an untested one at that. He does, however, say that it's proven. He then proceeds to showcase that proof by making an anecdotal claim about video stores, which isn't evidence, and then showing a chart.

Take a look at that link. It's not talking about profits rising or falling. The y-axis isn't "profits." It's sales expectations. It shows what CEOs think will happen to their company's growth during a given time period. The link even explains what it means: "public companies are built for growth, while many small businesses are more interested in sustaining their current business than growing." I don't get how this supports Pro's point, since it just shows that financial crises affect the sales expectations of large companies.

It seems like what Pro is getting at here is that big businesses throw their weight around, bringing down prices in order to out compete local businesses. He says that a progressive wage will solve for this. Two problems.

1) There's no reason to believe that a progressive wage will solve when a progressive tax hasn't. That's status quo. If Pro is right, we would expect that the progressive taxation system also brings about the same ends.
2) There's no reason to believe that the costs of paying more to minimum wage workers will be borne out as Pro suggests. They will always prefer their competitive advantage, which ensures that they can move in anywhere and get profits even with local competition, and thus distribute costs elsewhere, supercharging Pro's harms scenarios.

Pro has a Chicago Tribune link about Sam Zell saying that the top 1% of Americans work hard. It has no basis in this debate.

I don't know how the Stanford paper relevant to the debate. It talks about federal deficit and debt, which leads me to believe that he's conflating income gaps, which can be a result of monetary deficits on the part of the poor, with the government having too revenue to cover its financial obligations. It most certainly doesn't support his claim that "we would be evening and stabalizing [sic] the price of our cheetos nationwide." If anything, prices will increase. In fact, that seems to be the basis for this point " Pro's assumption of increased parity between small and large business prices seems to be based on large businesses being forced to increase their prices as a result of this policy. This may create some change in competition between them, but with the cost of the entire country experiencing inflated prices.

I'm not sure what he's getting at with his false comparison between a higher deficit between the rich and poor (the gap between them improves under both our policies), and a $3 deficit between lower classes. I'm at a loss for why creating income parity between minimum wage workers is beneficial.

Onto rebuttals. Pro doesn't spend much time here, and that is to his detriment.

I did have the employee third factor wrong (this was a result of some vagueness on the issue). However, this point is still not well defined. It essentially says that, as long as a business is hiring more people, they'll have to pay lower minimum wages. Pro doesn't say anything companies doing this hiring within the U.S., so this can still mean outsourcing jobs to other nations that don't have this minimum wage in order to inflate employment numbers. Pro might clarify this in the next round, but as it stands, it's not specific to U.S. employees. Even if it is, it's not specific to the type of employment. Simply hiring on a bunch of interns at lower levels of pay or no pay at all should satisfy this.

On capital, my response really doesn't change even while his case does. In fact, the harms get worse. Now companies have incentive to tie up extra funds in stock, making it all the harder to access, in order to reduce their wages by as much as possible. He says this isn't going to happen because "Investments cost money, are risky, and require upkeep," but considering that these companies will be weighing the certainty of paying higher wages to a large amount of their employees against these uncertain and possibly beneficial risks, I think this is the likelier route, since a) paying all their minimum wage employees more every pay period is more expensive, and b) the structure for investment already exists in these large companies, which means their costs to invest will be minimal.

Pro says that my argument is weak. He doesn't really explain why, instead just saying that my argument "relies on the belief that a increase in minimum wage, will outweigh the bottom line of investments." Actually, none of my arguments rely on that. I'm banking on the fact that incentive to avoid increased cost structures will lead to riskier behaviors. I provided several links that support this fact, showing that they do it to reduce their tax burden. Pro hasn't touched one.

They will most certainly engage in riskier behaviors if their bottom line is affected so heavily through wages, something that they can alter by changing their practices. Unlike with a minimum wage, the progressive wage can be gamed. Many will choose to send their money overseas, as some do now. Investors may leave, but that hasn't stopped companies from engaging in this behavior to avoid taxation.

The capital gains point was just meant to illustrate how companies subvert the system in status quo. It wouldn't affect their wage payouts here, though it is indicative of their reaction.

Lastly, Pro says these all exist in status quo. I think he's missing the point. By hugely increasing incentive to engage in these practices, Pro is making them exponentially worse. Whether the harms are the increasing the number lawsuits, higher risk, reduced investments, and nonexistent mergers, these will dramatically increase current harms. Yes, these things happen in status quo, but increasing their incidence is something we should avoid.

I was going to add some more to my case, but I'll leave it here. Back to Pro.

1. http://ftp.iza.org...
2. http://www.washingtonpost.com...
Debate Round No. 2
Jifpop09

Pro

To start, raising prices reduces the amount of business they get from customers, based on a basic model of supply and demand. That's not to say that it doesn't happen, just that it's unlikely to be large. Studies that evaluate the actual impact of hikes on prices see a maximum of 2.16%, with most companies increasing prices by below 0.4%.[1] Small businesses can afford to pass on the costs without closing.

I am unconvinced. I read the IZA article, and none of the studies were specifically stated, which prevented me from further research on their reliability. It is impossible to average price hikes on a national scale, and even if it were a reliable source of data, you are still strangling the 20% that are forced to raise prices will still be hurt.



He's also biting the harm to small businesses. It's possible that, on the four factors, some small businesses will be forced to pay higher amounts in minimum wage, and they won't have the finances to defend themselves in court or to engage in duplicitous accounting practices. Since Pro is already planning on increasing the minimum wage to the same height I am, and since some small businesses may be forced to pay more, Pro is uniquely increasing the chance of their closure.

Am I? As I said, the employee third factor is deducted after the wage is set, so its entirely possible for companies to pay below the floor if neccesary. Your argument that some would be forced to pay more, hurting small business, simply doesn't fit what I'm proposing. The wage is set based on the companies ability to pay, so this argument is invalid. Every stem argument resulting from this should be disregarded.


And on this, he's simply not doing enough to explain how it will work. Pro admits from the outset that this is a theory, and an untested one at that. He does, however, say that it's proven. He then proceeds to showcase that proof by making an anecdotal claim about video stores, which isn't evidence, and then showing a chart.

Assuming you read my link, Stanford gives examples on how certain deficits can be good. The whole point of the progressive wage laws, are to lower the deficit between the 1% and 50%, while also increasing marketplace competitiveness in the process. Even John Maynard Keynes touched upon artificial deficits, by creating gaps that benefit the lower class.


I really don't think this point can be argued. Its a simple economic truism. Deficits are needed for the success of a economy, but they can't be to high or to low. Currently the corporate deficit is incredibly slanted towards the "to big to fail" businesses. Your flat increase, doesn't address the underlying problem. Raising a flat wage will still keep the corporate deficit on the rise, and if some of your inflation arguments were true, then we can believe that nothing would change as far as the 1% paying a lesser burden.

1) There's no reason to believe that a progressive wage will solve when a progressive tax hasn't. That's status quo. If Pro is right, we would expect that the progressive taxation system also brings about the same ends.

Actually, I'm really glad you brought this up, as I believe this can be one of my strongest points. By constant attacks on the progressive tax, you leave me open to an analogy to the flat tax, which from my understanding, you find worst then the progressive one.


A flat tax, is the equivalent of the flat wage your advocating. Lets anaylze what the flat tax does.....

(1) Produces less fiscal revenue then the progressive one. Established.

(2) Does not effect the Deficit, leaving it to rise. Established.

The perk of a flat tax though, is that it doesn't hinder constant growth. Your flat wage can not claim the same benefit, at least not on the same level. At most, the progressive wage creates a 4$ deficit between the lower class, but lowers the deficit immensely to the 1%. So once again, I ask the audience, which is better? The answer seems quite obvious in my opinion.

2) There's no reason to believe that the costs of paying more to minimum wage workers will be borne out as Pro suggests. They will always prefer their competitive advantage, which ensures that they can move in anywhere and get profits even with local competition, and thus distribute costs elsewhere, supercharging Pro's harms scenarios.

I find myself repeating arguments, which leads me to believe that my rebuttals are being dropped by con. The system installs an artificial deficit, which increases competitiveness even further. By disregarding artificial deficits as valid, you are disagreeing with a lot of educated economists. That's fine and all, but your chain argument relies on it not working (Refer to bottom concession).

I'm confused on what your trying to say though. It doesn't matter if the rich favor their competitiveness. The rich aren't making the law to benefit them. I think what your trying to do though, is imitate the "trickle down" argument the right often makes in support of flat taxes.

Once again, you can't keep applying arguments for wages with ones for taxes. They don't apply the same. Trickle down doesn't even outweigh the progressive arguments. For that to be true, you would have to prove that stimulating the rich is more beneficial then stimulating the poor, and I think we can both agree that the rich are still retaining to much share. I might be wrong on what your trying to say, and this point may need to be reclarified.

Pro's assumption of increased parity between small and large business prices seems to be based on large businesses being forced to increase their prices as a result of this policy. This may create some change in competition between them, but with the cost of the entire country experiencing inflated prices

I have two great, most likely unintentional concessions here....

(1) He admitted that artificial deficits can work, which should cancel his earlier chain arguments.

(2) He admitted inflation is a problem, which contradicts his earlier argument that it isn't.

I do have to address number 2 though, since he marks it as a issue with my proposal. It doesn't make since, as his proposal actually causes the rich to inflate prices. He said so in his first argument this round. My proposal, prevents companies from inflating prices. The rich have to adjust their prices to match the rates of small business.

It essentially says that, as long as a business is hiring more people, they'll have to pay lower minimum wages. Pro doesn't say anything companies doing this hiring within the U.S., so this can still mean outsourcing jobs to other nations that don't have this minimum wage in order to inflate employment numbers

This is Con's worst argument, for two reasons...

(1) Who in their right minds would pay 15$ instead of a .15$ dollar decrease per employee?

(2) Minimum wage workers are not often outsourced. Probably not at all actually.

Come on, this is nonsense.

On capital, my response really doesn't change even while his case does. In fact, the harms get worse. Now companies have incentive to tie up extra funds in stock, making it all the harder to access, in order to reduce their wages by as much as possible

Con is good at giving ways to offset the wage with reckless business decisions. The stock market does not work like this. You can't simply tie up all your capital into one stock, and then sell it later. Even if you spread it around, its still unstable. That money that you invest gets spent, and I guarantee, you'll never see it again. And before a "funnel it into a fake business" argument is made, I would point out that this is illegal laundering.

You have to ask, are his arguments of outsourcing, mass stock investing, and illegal book changing even worth the 2$ wage increase. All these problems apply to his flat rate as well. Sorry audience, but I had to make my opening arguments in R2, so I can't further refute.

https://docs.google.com...
whiteflame

Con

Thanks to Jifpop for an intriguing, if a bit off kilter, debate.

Let's start with burdens. Note that Pro left R1 alone, despite barely having touched it in R2. So extend my burdens analysis. It is not enough for him to state that there is some possible for even probable benefit. He must show that it is very plausible, that it's substantial, and that the risk of harms is nil. I'm going to show how he hasn't done any of these things.

He starts his response by contending that inflation is a real problem. He's not doing much on this point, but I say grant his response – price inflation is a problem when wages are hiked. Pro is doing more to increase inflation than I am by adding a progressive increase on top of the basic minimum wage.

Now he tries to skirt out of this by saying that “the employee third factor is deducted after the wage is set, so its entirely possible for companies to pay below the floor if neccesary [sic].” I encourage every judge to check the previous rounds. There is absolutely no mention of a way to go beneath the $10.10 floor he set in this debate. In his first round, he says that this is the floor, and after multiple PMs, he verified this. Small businesses won't get a deduction. He's included no system to help small businesses, and is thus making it more difficult for them. That's not to mention that Pro dropped my analysis that they will never be able to fight any progressive increase to their wages that may occur.

Then we move into artificial deficit. Pro must win this point strongly to take the debate, but it seems he didn't understand my responses. He hasn't made any effort to back up his chart from the previous round, nor any of his other links except the Stanford one, and he's failed to even do that effectively. The Stanford link talks about federal deficits. The article doesn't mention private business anywhere. Thus, he's extrapolating from a system that functions on a completely different level from any business. Nor does this link tell us anything about how establishing an artificial deficit is beneficial.

This also creates a new harms scenario. He says, “Deficits are needed for the success of a economy, but they can't be to high or to low.” He never says how the system is somehow going to make these deficits just right. He says it will increase deficits, but increasing deficits to overly high levels is harmful, by his own admission. Pro can't titrate this effectively, especially since many companies already have high deficits. His policy doesn't account for that, meaning that they will suffer under this policy.

Pro's response on my point comparing the progressive wage to progressive taxation is patently absurd. He chooses to make mine seem akin to a flat tax. I'll grant that my policy has lower overall wages for minimum wage employees (though I would argue that $10.10 is a sufficient increase [1]), that it doesn't affect company deficits, and that it doesn't hinder constant growth. These are fantastic points for my side. Pro is admitting that his wage law is going to cost companies more – extend that point, as it supercharges the inflation and employment disadvantages that Pro himself made. Pro is admitting that my policy won't affect company deficits, so extend my points about how artificially inflating deficits is uncertain and dangerous. Pro is admitting that I have some gain, however minimal, that results from allowing company growth to continue, something that his own policy stymies.

Pro not responsive to my point that they will always prefer their competitive advantage, and therefore pass the costs to other parts of the company (affecting employment and short-term growth) rather than risk their customer base. This stymies their growth, thus reducing available jobs, services, and input to the economy. In other words, they're damned no matter what they do to cover those costs. I didn't argue trickle down, that doesn't play a role in my arguments.

I love how Pro characterizes my arguments as “unintentional concessions.” I admitted that changes in the competitive landscape are possible, that's all. Pro still hasn't proven that this is likely or beneficial. Pro even conceded in this round that “The rich have to adjust their prices to match the rates of small business.” Remember in the previous round how he said that local prices were higher than those charged by corporations? His plan outright requires that those lower prices rise to achieve the impacts of his deficit point – altering the dynamic is meant to produce price inflation for corporations in order to make sure local businesses can compete. Is that good? Well, more small businesses may be successful, but that means fewer large business expansions will. They will expand less, which leads to less economic benefit. At best, that's a wash. At worst, that's a huge problem, since these companies tend to be major players in our economic growth. And that's if his plan works out as he wants it to.

Pro basically drops my analysis on changes in hiring practices. I can't make heads or tails of his first response, and his second is not only wrong, but ignores my point. Of course companies outsource – in droves.[2] But even if they didn't, he's creating new incentive to outsource that doesn't exist in my plan. Outsourcing allows companies to reduce wages of all their minimum wage employees here by hiring more workers abroad. Only Pro's case creates this incentive. Pro also drops my argument that they will simply hire on a bunch of unpaid interns to the same effect.

Pro's response on capital is similarly weak. I'm saying that his case provides incentive to take this increased risk. He drops my point that they are only guaranteed increased costs if they keep that capital on hand. He might “guarantee” that they'll never see that money again, but his own link says its complicated. He drops my point that investing is also completely within their means. Pro still hasn't touched any of my links or arguments from R1, which means he's conceding that companies engage in incredibly risky business practices just to avoid taxation. They will do the same here.

Pro similarly remains unresponsive to my argument that there will be increased lawsuits and nonexistent mergers. By dropping these two points alone, he has conceded this debate. These harms are enough to ensure that he never meets his BoP, as he has failed to dissuade anyone from two of the largest harms I've presented. Even if judges buy every single advantage, the certainty that these will accompany them is enough to vote Con.

But there's plenty of other reasons. Pro's case and advantages have been incredibly inconsistent. He's against price inflation, but his whole case is predicated on producing it. He's against employment reductions, yet his case incentivizes hiring outside the country at lower wages and hiring unpaid interns rather than actual employees. He's against harming small businesses, but does nothing to protect them from higher wage requirements and ignores the realities of what large businesses have available to avoid them.

Let's compare cases. At worst, my case linearly increases incentive to avoid paying minimum wage. Pro's case has the exact same harm, plus providing the added incentive to avoid paying higher wages for all their minimum wage employees. The incentive to engage in risky behavior that harms companies, markets, and employees is demonstrably higher in Pro's world.

And remember, Pro's case has never been tried before. It hash no history in any country or evidence of effectiveness. It was Pro's burden to prove that none of that was necessary, and that we could trust the progressive wage to be effective without it. He hasn't done that. The harms are too big, the beneficial impact too small and uncertain. Vote Con.

1. http://www.huffingtonpost.com...
2. http://www.statisticbrain.com...
Debate Round No. 3
107 comments have been posted on this debate. Showing 1 through 10 records.
Posted by frankienstien 3 years ago
frankienstien
I'm not one for minimum wage laws, but I never considered progressive wage laws...
Posted by whiteflame 3 years ago
whiteflame
Your spam is not appreciated here.
Posted by IAlwaysWinDebates 3 years ago
IAlwaysWinDebates
Might help if his account didn't get closed.
Posted by Wylted 3 years ago
Wylted
I was one of the 5 judges but honestly with a 28 point lead and already so many good RFD's, there is no point in me doing this.
Posted by Romanii 3 years ago
Romanii
Lol what's wrong with judge debates, Jifpop?
Posted by whiteflame 3 years ago
whiteflame
Thanks to everyone for the detailed RFDs!
Posted by bladerunner060 3 years ago
bladerunner060
RFD 1/3:

A great debate from both sides of a dry but important topic. I decided to award the points to Con, but both sides made strong cases and debated well.

I'm going to start with some independent analysis--it's not to say that this analysis affected my vote on its own, but rather to help explain why Con's case came out stronger:

Pro's structure in R1 had a floor and a ceiling. The floor was the same as Con's proposal for raising the minimum wage. The ceiling is relatively irrelevant.

Now, without that floor, Pro's case was going to be rough--Con would have had an easy time showing that companies like Wal-Mart are going to undercut that with just hiring more workers.
Posted by bladerunner060 3 years ago
bladerunner060
RFD 2/3:

However, by having that floor, we see that all of Pro's arguments against Con's case apply equally to his own. And that's a problem for Pro--Con doesn't have to really defend his own proposal, the burden here was on Pro (the presumptive BoP, as well as Con noting that the BoP was on Pro). As such, Pro undermined his own case with all of his arguments about the harm's of Con's case--he really needed to show that Con's raise wasn't good enough, and that the benefits of his own proposal were greater.

Con showed how businesses will use any loophole they can to get around having to pay more. Con showed how benefits were consistent from Pro's proposal. Pro's case regarding product prices and their theoretical stabilization under his proposal seemed weak.

Pro made it part of his case that assets are to be included in this wage scheme--Con did not address (and so it doesn't factor into my voting) the notion that businesses with pricey *necessary* assets would be harmed more than those without such (think tech firms), but he does note that his incentive argument is not affected. Pro's case against this, that businesses won't use stock to avoid paying higher wages, was silly. There ARE relatively stable investments. Are they still a risk? Yes, of course, but he can't just handwave them away.
Posted by bladerunner060 3 years ago
bladerunner060
RFD 3/3:

At one point, Pro argues that his floor is not a hard floor. However, as Con notes, this was nowhere in the debate that I saw prior to Pro saying it. That changes the dynamic of his proposal rather a lot (and, really, makes the term "floor" rather nonsensical). There are problems with that that I note at the beginning of this RFD, but Con didn't address them because it was a pretty big change to the proposal, that hadn't been part of the original proposal--Con's right to say that Pro should be held to what he actually proposed.

On a side note, I'd like to say to Pro that having no floor is going to be problematic for your proposal, in that it sort of defeats the purpose of the minimum wage as generally regarded--it's supposed to be the floor of what is a "living wage", the idea being that it's supposed to be the minimum that a company should rightly pay its employees. Removing the floor lets businesses get away with paying a less-than-living wage, if they have enough employees. Again, this is aside from the debate as debated, but if Pro plans on tweaking his proposal and debating it again, I'd suggest he think about that.

Since the floors of both Pro's and Con's cases were identical, Pro needed to show that there were specific benefits to his proposal that weren't present in Con's case, and few harms. Con showed some harms, and showed how the benefits were unlikely to materialize. Considering the untested nature of Pro's proposal, I think that was sufficient to defeat Pro's case. As such, in the end, I don't see Pro as having fulfilled his BoP, and so give the win to Con.

As always, happy to clarify this RFD.
Posted by whiteflame 3 years ago
whiteflame
Hey now, I had to steal your profile pic. It's awesome
4 votes have been placed for this debate. Showing 1 through 4 records.
Vote Placed by bladerunner060 3 years ago
bladerunner060
Jifpop09whiteflame
Who won the debate:-Vote Checkmark
Reasons for voting decision: RFD in comments.
Vote Placed by thett3 3 years ago
thett3
Jifpop09whiteflame
Who won the debate:-Vote Checkmark
Reasons for voting decision: See comment Also YAY for up and down voting
Vote Placed by Romanii 3 years ago
Romanii
Jifpop09whiteflame
Who won the debate:-Vote Checkmark
Reasons for voting decision: RFD in comments.
Vote Placed by YYW 3 years ago
YYW
Jifpop09whiteflame
Who won the debate:-Vote Checkmark
Reasons for voting decision: PRO's case is idealistic but unrealistic -which CON sufficiently demonstrates on almost every point that PRO advances. PRO opposes inflation, yet his proposal is going to produce it. PRO opposes reduced employment, yet his proposal is going to harm domestic employment in at least three different areas. I'm not sure that CON's counter on PRO's impact to small business isn't overstated, but he wins that point nonetheless because PRO never demonstrated how small businesses are going to be able to overcome the increased burden leveraged on them by PRO's proposal. Companies, employees and markets are foreseeable worse in PRO's world, and that is to say nothing of CON's arguments about PRO's plan's impact on the courts. The harms to PRO's plan vastly outweigh the benefits, and CON therefore takes the win. However, PRO's proposal should be commended for its novelty and his thinking outside the box.