The Instigator
veni_vidi_vici
Pro (for)
Losing
0 Points
The Contender
Capitalistslave
Con (against)
Winning
5 Points

The minimum wage should be raised to $12.50 gradually, by the year 2020

Do you like this debate?NoYes+2
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
Capitalistslave
Voting Style: Open Point System: 7 Point
Started: 3/11/2017 Category: Economics
Updated: 8 months ago Status: Post Voting Period
Viewed: 674 times Debate No: 100815
Debate Rounds (4)
Comments (9)
Votes (1)

 

veni_vidi_vici

Pro

I believe raising the minimum wage to $12.50 would benefit The American economy. Round 1 will be acceptance only. This is my first debate so I don't really know what to expect, but please just be cordial. Thank you.
Capitalistslave

Con

I would like to clarify that we are talking about the United States' federal minimum wage. Is this correct?

But I do accept.
Debate Round No. 1
veni_vidi_vici

Pro

Yes, I am referring to the federal minimum wage in the United States and I apologize that I was unclear. I would like to open by thanking my opponent for accepting this debate and I am looking forward to have an intelligent discussion with you.

I will start by reasoning on moral grounds. "It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged." This quote is from Adam Smith's book 'The Wealth of Nations." Smith was a political economics pioneer and laid the foundations of what is known today as the classical free market system.

I believe that a person who works a full time job should not live in poverty. At $7.25, a single mother trying to raise her child will face many unnecessary difficulties because the current minimum wage is a starving one. As the American dollar is inflated and prices increase the minimum wage remains stagnant, and has been stagnant since the last increase in 2009. (dol.gov)

Also, American workers are more productive than ever before in American History(The New York Times). It only seems just, that they should share the benefits of this great feat.

Furthermore, a low minimum wage leads to gross underemployment, which is when workers don't earn enough money to cover all of their necessary expenses, which leads to employee turnover. Having recently worked in a restaurant that played minimum wage, a restaurant in which there was about a two month period when there were only eight employees, I can attest to this fact.

Since the minimum wage is regarded as a social justice, what is the point of having a minimum wage that is socially unjust? A $12.50 Federal minimum wage would fix this problem.
Capitalistslave

Con

My arguments

Minimum wage should be left up to more local governments
Not only would I argue that the federal minimum wage should not be raised, but it should not exist at all. Minimum wage should be up to more local governments, such as states.

1) Every state has a different situation, where each one has a different cost of living. 12.50 might be a good fit for some states, but it's not enough for states like California or Hawaii, and it 's way too much for states like Mississippi and Indiana. For a source on the cost of living in each state, here is one[1]

2) In addition to every state having a different situation, whenever the federal government passes a law, it affects more people than if the state government did. This means there are more people who would be opposed to the law than if a state government did it. For the purpose of making more people happy, and doing what is popular, it would be better to leave the minimum wage up to states or even more local governments. The more local the government that is making the law, the fewer people you have overall who will be dissatisfied with that law. I am concerned for the opinions of other people, even if they may have an opinion different from mine. I don't like the idea of forcing my views on other people, and the fewer people that I enforce my views on, the better. Why should South Carolinians, who, for the most part, are opposed to the minimum wage, be forced to have the minimum wage by the federal government?

Minimum wage increases limit the freedom of workers to choose their wage
Now, believe it or not, some workers may want to choose to be paid less than the minimum wage. I can think of at least one reason why: to be competitive. If you feel you can't get a well-paying job, you may make yourself more competitive to businesses by saying you'll work for less than someone else. Why should someone be denied the ability to ask to be paid less than a certain amount? I could name several times where I would have chosen to have a job that pays less than minimum wage. Not only would I get at least a little bit of money, but I would get work experience that I otherwise couldn't have. That would have lead me to get other jobs in the future that do pay well. Instead, what happened in reality because I couldn't find a way to be competitive for jobs, I didn't get a real somewhat permanent job until 4 years into job searching. Imagine how much sooner I could have gotten a somewhat permanent job if I was able to tell employers that I would work for 2 dollars an hour. I could have stayed at that job for a year, then maybe move onto a better job that paid 4 dollars an hour. Then one that pays 6 after a year, then one that pays 8 after another year. This is possible because I would have had work experience behind me from each previous job, and that would have added competitiveness to me. Over all, if I was able to start a job at $2 an hour, I would be earning more money now, in theory. Because I couldn't offer to work for a small amount, it likely hindered my ability to get a job until 4 years into job searching. I bet many other people have this problem: they can't find a job, and would love to work for less just to get work experience so that they can be competitive in the job market.

Rebuttals to opponent's arguments
I will put any quotes I use from my opponent in italics, but otherwise I will put in bold the subject.
Re: A person working full time should not live in poverty
It should first be noted that the poverty threshold in the United States is $12,082 for a single person[2]. If someone is earning 7.25 an hour and working full time, their yearly salary would be $15,080(I got this number by multiplying 7.25 by 40, the number of hours a week worked, and then multiplied by 52, the number of weeks in a year). A person living on their own is already above the poverty threshold if they work full time on the current federal minimum wage. Now, where they come into poverty is when they are trying to provide for 2 or more people. If we are to have a minimum wage, I think it should just be high enough to keep a single person out of poverty. Minimum wage, low-skill jobs aren't meant for providing for a family. You shouldn't be in a minimum wage job your entire life. If someone is in a minimum wage job for longer than a couple of years, they are probably doing something wrong, and this would be their own fault. Now, I do admit that it's not always the person's own fault for not having a higher-than-minimum wage job, perhaps the job market is very bad. In that case, the solution is for the governemnt to put policies in effect that will help the job market, not necessarily to increase the minimum wage. It should be noted, also, that there are a lot of high-paying careers which have shortages. Why aren't people going into those? Some of them include STEM fields, and the medical field. Granted, they do require education, and I do like the idea of public education to be tuition-free in some way. So, a solution to the problem would be to get education to be tuition-free in some way so that everyone has an equal chance at education.

Going back to the issue of a single mother trying to provide for her and children, I would argue the mother was stupid for having children before she could provide for them. Sorry for being so blunt and politically incorrect, but people need to be smart about things. You shouldn't have children if you can't provide for them! What kind of monster brings a life into this world that they can't provide for? Why aren't they thinking about how the child's quality of life will be before having it? If they can't make the child's quality of life to be good, then they shouldn't have children. Why should other people be punished for the mistake of a mother who decided to have children they can't afford? Other people, such as me, are punished with a minimum wage. As I said before, I probably could have gotten a job a lot sooner if there was no minimum wage. I bet a lot of other people feel the same way. Now, I won't be completely unsympathetic about the mother, but I think the solution to the problem where a mother is in a situation where they can't afford to provide for herself and her children would be charities. People should voluntarily help her out. Other people shouldn't be punished for the decisions of that mother, which I have the view that other people are punished for it by having a minimum wage.

Furthermore, a low minimum wage leads to gross underemployment, which is when workers don't earn enough money to cover all of their necessary expenses
Actually, I don't believe underemployment means that. I always thought it meant you have a job that you're too qualified for, and would be better fit for a job that is better than that one. This is basically what wikipedia says underemployment is[3]

Also, all of the problems my opponent talks about can be solved on the local level, keep this in mind. I would like to ask my opponent: why does the federal government need to do minimum wage? Why can't the states handle it? Whether the states have a minimum wage or the federal government does doesn't seem to make a difference in terms of the problems you're talking about.



Sources:
[1] https://www.missourieconomy.org...
[2] http://www.irp.wisc.edu...
[3] https://en.wikipedia.org...
Debate Round No. 2
veni_vidi_vici

Pro

Underemployment: A situation in which a worker is employed, but not in the desired capacity, whether in terms of compensation, hours, or level of skill and experience.

Read more: http://www.investorwords.com...

It appears to be that we were both using the term underemployment correctly.

Poverty: the state of being inferior in quality or insufficient in amount (as defined by Oxford dictionaries, definition 2.)

I was not referring to the poverty threshold in America, but to a definition of poverty in general. I also made an assumption, it was commonly accepted that someone who can't afford their clothing, nutrition, and housing from their own assets would be considered impoverished.

As to why I don't believe it should be left up to the states, I hope that my next point will answer that question.

P2: Having a low minimum wage means that many people will be in need of extra money to cover their basic needs. While there are charities in place that provide for low income individuals, it would be unwise to rely on the goodness of people's heart to cover for such a vast amount of the population. So, in order to provide for less fortunate Americans, who migrated into our country with low skills or were unable to afford a higher education, our government enlists safety net programs, A.K.A. income assistance programs.

Tanf: Temporary Assistance for Needy Families
Tanf was established to help low income families be able to provide for themselves. They accomplish this task by providing money to low income families for a certain amount of time (varies by case,)establishing programs that promote job preparation and marriage, and programs that encourage the formation and longevity of two parent households.
16.6 billion dollars spent annually on Tanf by the federal government. (Us census bureau)

Housing: Section 8 housing and Federal Rental assistance
Section 8 housing, formerly known as projects, are Federally built and maintained using U.S. tax dollars. Families living in these establishments pay little to no rent. Because these persons are low income individuals, sometimes receiving no income at all, they do not pay much into the tax pool either.
Federal Rental Assistance, uses the same housing vouchers that are used under section 8, but only pay a portion of the families' rent. This portion is calculated as no more than 30% of that families income and the unsubsidized rent is left to the family to pay.
$57,881,100,000 spent annually by the federal government.

Snap (Supplemental Nutritional Assistance Program) formerly known as food stamps
Snap is for qualifying families for use on grocery purchases only.
Average of $4,284 per household.

EITC (Earned Income Tax Credit)
The EITC is a tax refund for qualifying persons for up to 100% of the income tax they paid to the Federal government, it is important to note that this does not include social security and Medicaid taxes. The EITC can be turned into cash and used to purchase any good.
$3,373 per instance for a minimum wage earner. (Calculated by benefits.gov)

Total annual safety net program spending by the Federal government:
$362,000,000,000
(This includes more programs than those mentioned above.)

It is evident that low minimum wages create a lot of need throughout America. BY allowing companies to pay wages at $7.25 per hour or lower, we are allowing companies to gain more profits and forcing the federal government to pick up the bill. This is why I believe that the minimum wage should be raised Federally instead of on a state by state basis. Yes, while it is true that low skilled workers become less competitive, they will still need to cover their basic needs. This would mean that a given state will be able to make low skilled workers more competitive in their statewide workforce, and give them the potential of a higher paying job, but the federal government would have to cover for the needs of these people. I'd like to remind you that the primary source of revenue for the federal government is taxation, which means that it is tax payers who are really covering these costs. By Raising the minimum wage to $12.50 federally, we could reallocate capital put into safety net programs and make things fairer to taxpayers nationwide.
Capitalistslave

Con

It seems my opponent has dropped the argument about people being smart about when to have kids. This being the case, it still stands then.


Now, to move onto what my opponent has stated, I shall rebut or comment on every majort point:

Re: Definition of poverty
Usually oxfoddictionaries is reliable, but I really question that definition of the word poverty. What is it inferior to? If it is just inferior to anyone, then it could be said that everyone who is poorer than the richest person in the world is in poverty. That's the issue with that definition.

it was commonly accepted that someone who can't afford their clothing, nutrition, and housing from their own assets would be considered impoverished.

Right, the poverty threshold is what covers that. Someone who earns less than the threshold would be unable to afford those basic needs. I would like to point out that it would be basic clothing, housing, and food. Someone who spends exorbitantly on these items and can't afford it would not be in poverty. Someone who earns more than the threshold would be able to afford those basic items.

Re: safety net programs
I would prefer that the government did projects that created jobs, rather than just giving free money to people. The old proverb of give a man a fish, feed him for a day, but teach a man to fish, feed him for a lifetime comes to mind. Is it really helping someone in the long run to make them dependent on the government for their needs? I argue it is not. The government, instead, should be providing means in which a person can independently earn income for necessary items. There should be government programs that teach people how to become independent and earn their own money, rather than just giving hand outs. How can you argue it is better for a person to be dependent on the government rather than the government teaching them to be independent? For this reason I would argue there should not be safety net programs of the type we currently have. The safety net programs should be jobs that the governmetn offers. There's a ton of infrastructure improvement that needs to happen. Why not have the government employ those people who are needy instead? Additionally, I'd argue we need more schools in America, as there is an over-crowding classroom problem[4]. The government could also offer them jobs building these schools we need. There are always projects that the government needs done. Once the government builds these schools, they can offer them jobs as teachers. However, I would say that while they were working building the school, they should be given the education needed to become a teacher. The government could do a lot of things to create more jobs, and this is the alternative to safety net programs and the minimum wage in my opinion.

BY allowing companies to pay wages at $7.25 per hour or lower, we are allowing companies to gain more profits and forcing the federal government to pick up the bill.
The thing about companies gaining more profit is that it allows them to sell things at a lower price. Companies, to compensate for the minimum wage increase, will sell things at a higher price. So, while some people may be making more money, it will mean they have to pay more for things anyways. For example, this study of businesses in Seattle after the minimum wage increase there saw prices of goods rise substantially[5]. We would likely see the same effect nationwide if we had a minimum wage increase. Does it help the poor any if they are earning more, but have to spend more for basic needs? No.

I know this has nothing to do with the federal government, but if you want to help the poor out, how about getting rid of sales taxes and gas taxes? Both are essentially regressive taxes as they affect the poor more than the wealthy. In addition, I would argue we should get rid of the social security tax. Immediately, the poor would have 12% more money because the government wouldn't be taking money out of their pay check. Social security could instead be paid for by the income tax, if we were to increase it on the wealthy.

These solutions would be better than raising the minimum wage, because they wouldn't cause prices of things to go up, and getting rid of sales tax and gas tax would mean prices would go down. Additionally, if property tax was gone, that would also lower the rates of rent on apartments, which would help the poor even more.

So, why not cut all of these taxes to make things affordable for the poor instead of raising the minimum wage? The government is the reason many things cost so much for the poor.

Sources:
[4] https://nces.ed.gov...
[5] http://www.washington.edu...
Debate Round No. 3
veni_vidi_vici

Pro

Since we are now in our last round, I would like to avoid a tax debate with you. It is a very deep and interesting topic and I would be more than happy to discuss it in a separate debate. For now, allow me to make my final point.

Minimum wage is an excellent way to stimulate the economy. in fact, it is one of the only ways to do so without federal spending, which increases national debt. Economic theory tells us that if wages were to increase, consumers would buy more products, pay off debts, and/or start saving more money. In all three of these instances more money is being put into the economy. Since businesses are taxed and regulated so heavily in America, much of this capital is being sucked out of circulation via the multitudes of business taxes. If the minimum wage were to increase, we would see stimulus in the economy.

The Circular flow model
Since I am unsure how to post pictures on this site, I will try to illustrate this concept to the best of my ability with words.
In the product market, firms sell goods and services which are purchased by households. Households in turn, provide labor, capital, natural resources, and entrepreneurship on the resource market, which is purchased by firms.
In the product market, Households provide expenditure, which is turned into revenue for firms. Firms then convert that revenue into wages, rent, interest, and profit. These things are turned into income for households.

Although record high worker productivity has allowed businesses to earn more revenue, we have not seen similar growth in the wages of workers. If you can imagine that the circular flow model functions as a wheel (capitalism) an increase in any one section should lead to an increase in all of the others, but instead wages increasing corporate profits are receiving this benefit. This is why much of this extra revenue is sucked out of circulation by taxation. If wages increased to meet, or at the very least be closer to, worker productivity, this would allow the wheel of capitalism to turn even faster.

While this theory is widely accepted by economists, there is empirical evidence that shows this same truth. There was a study done by Eric French and Daniel Aaronson, economists at the federal reserve bank in Chicago, that showed the effects of raising the minimum wage on aggregate household spending. They estimated that a $1.75 increase in the minimum wage would increase consumer spending by $26 billion dollars.

Finally, I would like to cite one last piece of empirical evidence. Economists Alan B. Kreuger and David Card conducted a study that analyzed the Full time employment effects on the fast food industry in 1992, when Pennsylvania had it's minimum wage at $4.25, and New Jersey's minimum wage was at $5.05. New Jersey experienced an employment increase in the industry, Pennsylvania experienced an employment decline. If this were to happen on a federal level as well, the employment increase would definitely lead to economic stimulus.

I hope this debate has enlightened you just as much as it has myself, and I hope I convinced at least some of you that raising the minimum wage to $12.50 would benefit the economy. I'd like to close by thanking my opponent for an excellent debate and I am anxiously awaiting our results. Thank You!

sources:
Chicago Fed Letter: How Does a Federal Minimum Wage Hike Affect Aggregate Household Spending? By Daniel Aaronson and Eric French
Minimum Wages and employment: A case study in the Fast Food industry of Pennsylvania and New Jersey. By Alan B. Kreuger and David Card
Microeconomics: A Contemporary introduction. By William A. McEachern

Special Thanks to my mentor, whose name I am hesitant to publish on the internet, for guiding me in myriad ways throughout this journey. I wouldn't have debated nearly as effectively without you.
Capitalistslave

Con

It seems my opponent also dropped all of my round 3 arguments, so each of them still stand. My opponent has brought up only new arguments in this round, which is usually seen as poor conduct, but I'm okay with it because I still get to respond to it since I'm second to post arguments.

Now, I will address points by my opponent:

Although record high worker productivity has allowed businesses to earn more revenue, we have not seen similar growth in the wages of workers
Actually, we have been having wage growth. A look at the past 50 years or so shows that the only times we didn't have much growth were during recessions. Otherwise, we've been averaging around a 4-5% increase in wages every month. [6]

There was a study done by Eric French and Daniel Aaronson, economists at the federal reserve bank in Chicago, that showed the effects of raising the minimum wage on aggregate household spending. They estimated that a $1.75 increase in the minimum wage would increase consumer spending by $26 billion dollars.
There's more than just one way to increase consumer spending. Lowering the prices of products would also allow people to purchase more. Raising the minimum wage, as I showed, would result in prices of products rising. So, while people would be spending more, they still would likely only be able to afford the same amount of products they did previously. It doesn't really change anything. Because of the fact that employers would have to pay their employees more, it means their profit margins go down, and that results in them raising their prices. It doesn't have any net effect on the purchasing power of consumers. Spending more doesn't necessarily stimulate the economy, what really does is to increase the purchasing power of people so that they can buy more things. Simply making them spend more doesn't necessarily do anything, because how they are spending more is due to prices rising. What really does something to the economy is increase purchasing power. To increase purchasing power, getting rid of those taxes I mentioned would do so. There is another number of ways of increasing purchasing power, such as having wages go up when prices remain the same or go down, and when prices of products go down while wages stay the same or go up. Having wages go up but prices go up at the same time and rate does nothing for the economy because it doesn't increase purchasing power. A minimum wage increase would result in prices going up, as the study I provided earlier, which you didn't refute, showed.

Finally, I would like to cite one last piece of empirical evidence. Economists Alan B. Kreuger and David Card conducted a study that analyzed the Full time employment effects on the fast food industry in 1992, when Pennsylvania had it's minimum wage at $4.25, and New Jersey's minimum wage was at $5.05. New Jersey experienced an employment increase in the industry, Pennsylvania experienced an employment decline. If this were to happen on a federal level as well, the employment increase would definitely lead to economic stimulus.
This only proves correlation. For one, New Jersey and Pennsylvania are two completely different states which have different state government policies. A number of things could have affected the employment level of the two states. To claim the minimum wage increase is the reason for it is a logical fallacy. Unless you rule out all other potential reasons for the employment difference, this study doesn't prove anything except for correlation. In fact, logic would tell us that minimum wage increases would result in a lowering of employment, because employers wouldn't be able to afford to have as many employees. To claim that the employment rose due to the minimum wage difference is an extraordinary claim that needs extraordinary evidence. Showing correlation doesn't prove it.

As the congressional budget office points out, a raise in minimum wage would likely elliminate jobs[7] So, because logic tells us that a minimum wage increase would result in the loss of jobs, there was likely some other reason why New Jersey saw an increase in employment and pennsylvania saw a decrease in employment. This study also suggests that raises in minimum wage decreases job growth[8]. They originally were going into the study with the belief that minimum wage had no effect on employment levels, but discovered that it negatively affects job growth.

In conclusion, I believe since there were several important points that I brought up which my opponent dropped, and that I believe I have successfully refuted my opponent's arguments, you should vote con for arguments.

Sources:
[6] http://www.tradingeconomics.com...
[7] https://www.cbo.gov...
[8] http://people.tamu.edu...
Debate Round No. 4
9 comments have been posted on this debate. Showing 1 through 9 records.
Posted by ShaunTakesOn 8 months ago
ShaunTakesOn
There is some money that just sits around and not go back into circulation. Not all of it or even most of it. But there is still a large amount.
Posted by veni_vidi_vici 8 months ago
veni_vidi_vici
I agree completely, income inequality in this country is unprecedented. You did however, state that money just sits in bank accounts and does not go back into circulation. I was simply trying to show that this was not the case, as it could hinder my 4th round argument. I was simply looking to defend my point. My intention was not to attack you in any way but I apologize if it seemed that way.
Posted by ShaunTakesOn 8 months ago
ShaunTakesOn
@veni_vidi_vici, I never suggested taking all of their money. Of course some has to be left for loans and investments. I just said I have nothing against taxing rich people a little more, not to completely rob them blind.
Posted by veni_vidi_vici 8 months ago
veni_vidi_vici
Also, money in bank accounts is loaned out to other banks, or other individuals, or invested in the form of federal or corporate bonds, then paid back with interest. When there's no money in banks people don't invest and businesses can't grow, hence the market failure in 1929.
Posted by veni_vidi_vici 8 months ago
veni_vidi_vici
well property is taxed on the city or county level, depending on your state, to generate revenue. Sales tax is for state governments to generate revenue, and some states charge an additional income tax. Gas tax in America is extremely low when compared to other nations with economies similar to the US, excluding Canada and Mexico. Gas and income are the only of these taxes charged by the federal government.
Posted by ShaunTakesOn 8 months ago
ShaunTakesOn
I'm not opposed to taxing the wealthy more. When resources are limited, someone has to receive less for someone else to receive more. A lot of the wealthy make more than they will ever spend, so why not put some of that money in the pockets of people who need it more and will actually put it to use. There's too much money just sitting around in rich people's bank accounts that isn't going back into circulation.
Posted by Capitalistslave 8 months ago
Capitalistslave
Now, I know a liberal will probably argue "well how would we pay for the things we need without these taxes?" I would say that the only tax we need is the progressive income tax. That's where my left-view comes in, I suppose, since I imagine you would be opposed to raising the taxes on the wealthy.
Posted by Capitalistslave 8 months ago
Capitalistslave
ShaunTakesOn: precisely. I'm a leftist and I recognize this problem of the minimum wage even. What would actually help the poor is to get rid of sales taxes, the gas tax, social security tax and property tax.

The poor are usually the ones who don't have the convenience of being able to live close to where they work, so they have to pay more on gas, thus the gas tax is a regressive tax. The sales tax is also a regressive tax as the poor spend more percentage of their income than the rich do. Then if the social security tax was gone, the poor would be able to keep an additional 12% of their income, or however much social security takes out. And finally, with the property tax gone, apartments would be able to charge a lower rate for rent, thus helping the poor out more.

The solution is to end these taxes that are making things expensive for the poor. If things weren't as expensive, they wouldn't need as much income.
Posted by ShaunTakesOn 8 months ago
ShaunTakesOn
How would it help anyone to increase the minimum wage? Every time it's increased, companies raise the price of their products. So, you just end up still only being able to afford the exact same things. Earning more + paying more = same end result.
1 votes has been placed for this debate.
Vote Placed by John_C_1812 8 months ago
John_C_1812
veni_vidi_viciCapitalistslaveTied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:-Vote Checkmark-0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:-Vote Checkmark-2 points
Total points awarded:05 
Reasons for voting decision: Raising Minimum wage is a legislation hidden tax increase be it State or Federal mandate. There is a conflict of interest created as both State and Federal agencies collect taxation that is spent on job training while also loaning money for institutions to provide these services.