The minimum mage should be abolished
|Voting Style:||Open with Elo Restrictions||Point System:||7 Point|
|Updated:||2 years ago||Status:||Post Voting Period|
|Viewed:||844 times||Debate No:||70154|
I am challenging ZexLiberty to this debate to defend a comment he made in the forums in a thread created by imabench, which can be found here: http://www.debate.org...
He stated the following:
"Eliminate laws regarding the minimum wage. There should be no legally enforced minimum wage. The government should not regulate how much an employer can pay a voluntary employee. Organized Labor and individuals can bargain for higher wages and better working conditions if they wish to do so."
I'd like for him to defend this assertion in a formal debate, and genuinely hope that he will accept. It will certainly be a nice way to integrate himself into the community!
Definition and Particulars
Resolved: The minimum mage should be abolished
PRO will argue that the minimum wage should be abolished, whereas CON will argue that it should not be. The resolution is normative in nature, and thus the burden of proof will be evenly split.
Minimum Wage: "an amount of money that is the least amount of money per hour that workers must be paid according to the law" (http://www.merriam-webster.com...). The resolution does not specify who sets the minimum wage--be it a federal or state government--so this will simply apply to any minimum wage law, whereby CON defends their existence and PRO argues for their abolition.
Abolish: "to officially end or stop (something, such as a law) : to completely do away with (something)" (http://www.merriam-webster.com...).
Round 1: CON provides rules and structure. PRO provides affrmative case.
Round 2: CON provides negative case. PRO rebuts CON's case.
Round 3: CON rebuts PRO's case. PRO defends his case.
Round 4: Con defends his case. PRO passes to even out the rounds.
1. Accepting this debate is consenting to the rules and guidelines laid out in this opening post.
2. Failure to adhere to any of these rules will result in forfeiting this debate.
3. Forfeits are not allowed.
4. Any semantial games or resolution trolling is not allowed.
5. Be respectful. No personal attacks or changing the goalposts.
6. The burden of proof is equally shared.
Thank you to ZexLiberty in advance if he opts to accept, and I welcome him to the website. Hopefully this will be a great first debate for him. It's certainly a topic that I find quite interesting.
I accept your challenge ResponsiblyIrresponsible. Thank you for providing me with an opportunity to defend my views and get involved in the community.
Reasons why the Minimum Wage should be abolished:
1. The amount an employee gets paid should essentially mainly be between an employer and an employee. If an individual does not wish to be paid a certain wage by an employer he or she can refuse to work for him or her. If an employer does not wish to pay a worker a certain wage, he or she does not have to hire him or her. If there is consent between the employer and the employee as to how much he or she wishes to get paid, the government should not have the right to intrude upon that decision.
2. Economic Theory states that businesses and jobs will move to where conditions are most favorable. (Assuming that no new tariffs or restrictions on foreign trade are added) The Minimum Wage could aid in shipping jobs overseas where these restrictions on wages are not placed and increasing domestic unemployment.
3. There are better options and ways to ensure better pay other than government intervention. Collective Barganing is a much better option than a government enforced minimum wage. Countries such as Switzerland which have no minimum wage have unemployment rates well below those which do. Pay scales are determined by contracts or collective barganing. Wages are high and unemployment is low.
I will be waiting for a rebuttal and for any new arguments that ResponsiblyIrresponsible sets out.
Thanks to ZexLiberty for accepting this debate. I’ll present my case in this round and rebut his in the next.
-- Neg Case --
You should evaluate our arguments based on a cost-benefit analysis, weighing economic arguments higher than moral arguments. In the case of the latter, we cannot properly assess the net impact to societal welfare because we lack the capacity to discern an objective moral framework and weigh competing moral claims within an optimal moral system. Insofar as morality is objective, we cannot properly glean it, and to assert that there are accessible moral absolutes is to deny pareto optimality, a state in which it impossible to make one individual better off without making another worse off (1). Attempting to evaluate arguments based on moral absolutes completely obscures the fact that societal welfare, on net, would improve via redistributing wealth, as the minimum wage contributes to. Moreover, economic impacts are clear, empirically sound, and capable of being readily evaluated. Therefore, you should prefer them over moral impacts.
Raising the minimum wage would be a boon to the U.S. economy because it would increase consumption. Carroll et al., 2013, found that the marginal propensity to consume is far greater for lower- and middle-income households than it is for high income households (2). The CBO finds that "The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO"s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates" (3). Wage pressures would build not only for minimum wage workers, but for many more workers, all of whom are likely to consume with those dollars, thus stimulating economic activity.
II. Efficiency Wage Hypothesis
The efficiency wage hypothesis "states that workers' productivities depend positively on their wages" (4). A literature review by Wolfers and Zilinsky, 2015 (3) finds a myriad of real-world evidence for this theory that higher wages tend to induce workers to work harder, which benefits businesses, who are able to produce more and thus sell more.
In addition to increased productivity, higher wages also increase labor supply, attracting better and more productive workers. Rossi et al., 2013, found that "offering higher wages attracts individuals with higher previous earnings, and who have both higher IQ and more desirable personality traits, as measured by the Big 5 personality and public service motivation tests" (8).
Higher wages also reduce labor turnover, reducing the cost of training and hiring new workers and thus saving businesses money. Reich et al., 2003, in a study of the San Francisco airport, found that higher wages reduced labor turnover by 34%, thus saving the airport $6.6 million per year (9). Reich et al., 2007, found that a San Francisco wage floor policy reduced labor turnover from 95% in the mid-2000s to 18.7%--a 763 basis point decline (10).
There are also a multiplicity of other ways in which higher wages improve labor efficiency. Fisher et al., 2006, used data from 500 retailers to find that higher wages improve customer service and customer satisfaction (11). Capelli and Chauvin, 1991, found that higher wages improved employee discipline (12). Zhang et al., 2013, found that in Canadian firms higher wages resulted in reduced employee absenteeism (13). Finally, Georgiadis, 2008, find that, because higher-wage workers tend to require less supervision than low-skilled workers, "higher wage costs were more than offset by lower monitoring costs" (14).
Therefore, there a myriad of ways that raising the minimum wage would actually save businesses money through greater efficiency, offsetting cost increases.
III. Income Inequality
The U.S. is plagued with the worst income inequality since 1928 (15), and research by Saez, 2013, shows that it has been increasing steadily since the 1970s (16). This coincided with widespread deregulation and tax cuts under Ronald Reagan and his attacks on labor unions (17), and a nearly doubling of productivity over the past thirty years, but flat wages for most workers, adjusted for inflation (18), and falling real wages for minimum wage workers, whose wages aren't adjusted for inflation (19). For instance, the minimum wage from 1979 to 2012 fell 21 percent (20). This is undesirable not only on a moral basis because people are paid not what they're due or what their skill set lends itself to, but are placed at a lower rung of the economic ladder as their starting place, based on characteristics outside of their own control--e.g., their family's socioeconomic status--and thus are denied equality of opportunity (especially because this is self-reinforcing, as the affluent are able to donate to politicians, coaxing them to pursue politicians beneficial to them, such as tax cuts and subsidies); it is also economically undesirable. Nobel Laureate Joe Stiglitz adds the following:
"There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth...Second, the hollowing out of the middle class since the 1970s, in a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses..Third, the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks...Fourth, inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable" (21).
Now, how does the minimum wage tie to this? Simple: it's contributed to the widening disparity in income distribution which dates by to the 1970s because it's declined in real terms. Autor et al., 2014, estimate that 30 to 50% of the growth in income inequality from 1979 to 1989 can be attributed to the falling real value of the minimum wage, and they note a still significant contribution from 1979 to 2012 (22). Note that the authors admit that these estimates are conservative, and there"s a body of literature attributing as much as 85% to 110% of the rise in inequality to the falling real value of the minimum wage.
V. The MW does not kill jobs
A canard that my adversary will raise is that MW results in layoffs. Obviously that falls short in light of the evidence I presented earlier in this round, but the claim is without strong empirical backing. In fact, John Schmitt, 2013, conducted a literature review and found that the minimum wage has "no discernible effect on employment" (23). Much of this is because, per Krugman, minimum wage jobs exist in industries which are non-exportable (24). Let's explore some of the relevant literature.
Card and Krueger, 1994, looked at the 1992 rise in New Jersey’s minimum wage and found no evidence of negative employment effects (25). In fact, they found, after comparing evidence from stores in eastern Pennsylvania where the MW remained constant or to stores that were already paying near wages near the MW, that the minimum wage actually worked to increase employment. Dube et al., 2010, replicated the findings of Car and Krueger and found no negative employment effects after adjusting for spatial heterogeneity (26). Next, a meta-analysis by Doucouliagos and T. D. Stanley, 2009, looked at 64 minimum wage studies from 1972 to 2007, and found that, after adjusting for public selection bias, that the evidence is clear that the minimum wage has virtually no effect on employment (27).
Now, how far could we go? Michael Reich, economist at U.C. Berkeley, finds that, "“Our data show that an increase up to $13 an hour has no measurable effect on employment" (28).
Round 2 Rebuttal
Regarding the Consumption, the Efficiency Wage Hypothesis, and Income inequality sections, my opponent makes the case that increasing wages for low-wage earners and reducing inequality would be beneficial to society. I do not dispute this point and am not making the case that inequality and poor wages for low-wage earners are desirable. ResponsiblyIrresponsible does not explain why or how the implementation of a legally enforced minimum wage is necessary or the best option in increasing the wages of low-wage earners and reducing inequality, and he or she does not consider or address other non-governmental possible ways of achieving these goals such as collective bartering or unionizing. Again, I am not suggesting that increasing wages for low-wage earners and reducing inequality are not desirable. I am arguing that the minimum wage should be abolished and considering the fact that there are other non-governmental options which can work towards the same goals the minimum wage was designed to reach more effectively.
Points regarding Minimum Wage:
2. Effects on low-skilled workers: Evidence shows minimum wage increases substantially hurts the very people they were designed to help. The 2006 Neumark and Wascher review found the literature “as largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers. A 2012 analysis of the New York State minimum wage increase from $5.15 to $6.75 per hour found a “20.2 to 21.8 percent reduction in the employment of younger less-educated individuals. A 2010 analysis by Michael J. Hicks found: “the latest round of minimum wage increases” account “for roughly 550,000 fewer part-time jobs,” including “roughly 310,000 fewer teenagers working part-time.”
3. Reducing Poverty: The minimum wage doesn't reduce poverty. In the previous federal minimum wage increase from $5.15 to $7.25, only 15 percent of the workers who were expected to gain from it lived in poor households, according to a 2012 Wilson review. If the minimum were today raised to $9.50, only 11 percent of workers who would gain live in poor households. The 2012 Wilson review noted: “Since 1995, eight studies have examined the income and poverty effects of minimum wage increases, and all but one have found that past minimum wage hikes had no effect on poverty.” The 2012 Wilson review noted: “One recent academic study found that both state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates.”
4. Who Pays? Someone has to pay for increases in the minimum wage. The 2012 Wilson review noted: A 2004 “review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent.” A 2007 study from the Federal Reserve Bank of Chicago found that restaurant prices increase in response to minimum wage increases.
5. Detrimental effects of the minimum wage oversees and other options. There are seven European Union countries in which no minimum wage is mandated (Austria, Cyprus, Denmark, Finland, Germany, Italy, and Sweden). If we compare the levels of unemployment in these countries with E.U. countries that impose a minimum wage, the results are clear. A minimum wage leads to higher levels of unemployment. In the 21 countries with a minimum wage, the average country has an unemployment rate of 11.8%. Whereas, the average unemployment rate in the seven countries without mandated minimum wages is about one third lower — at 7.9%. Many of these countries however have organized labor which engage in collective bartering.
6. Income Inequality: Let's observe the gini coefficient of the nations in the European Union without a mandatory minimum wage and the European Union overall. (Austria - 0.26 Cyprus - 0.29 Denmark - 0.24 Finland - 0.269 Germany - 0.306 Italy - 0.36 Sweden - 0.25). The average gini coefficient of all members within the European Union is 0.305, so nations within the European Unon without a mandatory minimum wage are on average more equal than nations which have a government set minimum wage. A minimum wage is not necessary for a relatively economically egalitarian country. Of course many individuals in these nations are involved in organized labor and organized bartering, but there is no legally enforced minimum wage.
I thank PRO for his round. I'm now going to rebut his case, without addressing his rebuttal of mine until the next round.
Before I begin, there is one issue I'd like to address--and that PRO's use of sourcing. His points 1 through 5 are copy and pasted from two CATO articles he links below without being footnoted or placed in quotation marks. Obviously, this is not the proper way to source an argument and can be taken to be plagiarism, especially since he copy and pasted most of these arguments instead of writing them himself. PRO's failure, also, to footnote his sources akes them much harder to track down.
Rebutting PRO's case
PRO provides no framework analysis or way in which the judges ought to evaluate arguments—so I urge our judges not to allow him to initiate his own in latter rounds after I don't have a chance to rebut it, as it would be grossly unfair for him to present an original framework analysis then. Therefore, I urge you to prefer my framework of evaluating economic impacts ahead of moral impacts.
1. PRO argues that an employee pay should be decided between an employee or employer. His justification for this is, first, that if an employee doesn’t want to work at a certain wage, he can work elsewhere. There are several glaring problems with this overly simplistic contention: it does not hold up under the slightest bit of real-world scrutiny. If you look at the trend over the past three-decades, where productivity has nearly doubled but wages have been flat in real terms, it is clear that workers lack adequate bargaining leverage to properly negotiate wages. PRO’s remarks make the assumption of perfect competition for labor, perfect information amongst buyers and sellers about alternate employment, perfect rationality in the sense that employees and employees will be mindful of alternate employment in making their decisions, and perfectly equal bargaining power, all of which he provides no evidence for—because they only hold under a ceteris-paribus microeconomic model, not with real-world data.
PRO claims, “If an employer does not wish to pay a worker a certain wage, he or she does not have to hire him or her.” First, you should note how utterly facile this argument is because it lacks a warrant. His argument against the minimum wage is “employers should not do what they don’t want to do.” But why is that? He provides us no reason with why that ought to be the case. Employers are forced to do a lot of things they may not want to—be it complying with taxes or regulations, or even providing a safe work environment. Restrictions on freedom exist even in the sense that my freedom to swing my fist ends where another person’s nose begins. There are plausible, sound restrictions on freedom—and one of those is ensuring that employees are properly compensated for their labor, and cannot fall victim to differentials in bargaining power that have contributed to most of the gains over the past thirty years and since the onset of the 2009 recovery to the top of the income distribution. This is especially true not only by virtue of my arguments on pareto optimality in my framework analysis, but also because employers will tend to benefit immensely not only from greater efficiencies from a minimum wage hike, but also from the decline in income inequality which depresses consumption, feeds speculative bubbles, and destroys future innovation.
PRO then argues that “[i]f there is consent between the employer and employee as to how much be or she wishes to get paid, the government should not have the right to intrude upon that decision.” Once more, there’s no warrant for that claim: why should that be the case? Thus far he’s provided only moral arguments, but doesn’t explain why these morally or logically follow, nor is there an optimal moral framework, all of which supports my analysis from the last round that you should weigh economic arguments higher than moral arguments. He is assuming that all contracts ought to be enforced, in spite of what the terms of agreement actually were. But what if one of the participants was under durress--e.g., predatory lending that led up to the subprime crisis--or imperfect information or was being exploited? Moreover, what if that contract originated from the fact that employers, by virtue of a myriad of developments over the past thrity or so years--globalization, attacks on labor unions, tax cuts for the affluent coupled with the abiltiy for rich people to donate unlimited sums of money to political campaigns, etc.--have significanlty more barganing power than their employeses? There is ultimately no reason at all that we ought to accept this claim, or the supremacy of any human action which may in fact be tainted. There are perfectly reasonable for the government to interfere in contracts to correct for inherent, systemic unjustices, among which are is the perpetuation of poverty-level wages in spite of rapid productivity gains over the past three decades.
I don't seem to be able to defend my case. I know this is against one of the rules above, but I forfeit. I thank ReponsiblyIrresponsible for the debate and will look over some of my views on the minimum wage.
Judges, please vote CON on arguments, but award PRO conduct.
I will pass this round.
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