Welfare/Redistribution is actually harmful for poor people
Debate Rounds (4)
Second round for argumentation
Third and Fourth Rounds for rebuttals
To better understand what is good and bad for low-incomes, we need first understand what makes people poor. These 2 evils are unemployment (for obvious reasons) and inflation, making it much more expensive to be poor, especially that inflation has been higher on things that low-income household spend a high proportion of their money on (rents, utilities …) . Therefore it seems logical that to better help low-income people, we need first address the issues that make them poorer
«We should measure welfare's success by how many people leave welfare, not by how many are added» Ronald Reagan
Minimum wage : The current federal minimum wage in the US is $7.25/hour.
Minimum wage doesn’t help poor workers, or it helps only those whose productivity is just below the productivity that is necessary to earn these $7.25/hour on a free (aka a very small number). To understand why MW creates unemployment, we need to take a look on the only that matters : the supply and demand. If you impose a minimum wage, it has to be higher than the natural price of the market (otherwise it is useless because workers would be paid as much without it). And we see that when the higher the wage is, the less employment there is (what is logical because employers will prefer not hiring people if it costs them more than it brings them / or they need ) .
In Seattle, the minimum wage has been risen to $15/hour, and the economic situation of the situation has worsened, especially for small businesses (stores, restaurants..) . Many of them has been forced to downsize the amount of their workforce, rise their prices and/or buy products of less quality.
This policy makes it much harder for unemployed people to be hired, and put the job of many people at risk.
Unemployment benefits : The idea here is pretty much the same than for the minimum wage. This compensation can discourage workers from taking jobs (since a rational person weights the pro and the con of every situation, if his/her wage is similar to the salary of the job offer, he hasn’t any interest in leaving his cough). People who would wait a long before searching another job, knowing that unemployment benefits assure them a living will have much more problem in finding another job, since they are not used to sell themselves on the job market anymore.
Financing welfare : Since more growth is the best way to fight unemployment, these welfare policies cost a lot of money. Either the public authorities raise taxes or they go into even more debts.
For obvious reasons, raising taxes hurt economic growth (furthermore that we know that the 1% wealthiest know how to use every loopholes to avoid paying taxes, so businesses and middle class will pay more). Tax money is simply money that is taken out of the economic system, either this money is not used for household consumption (so less money for companies, so less investment and employment), either this money is not used for investment (company tax) , and will make companies less profitable (and less likely to hire people or raise wages …)
Second solution is for city/State/federal government to go into debts, what will increase the money supply, and therefore create inflation, making it harder to low income households to live properly.
Redistribution is absolutely necessary it ensures that the top 1% do not end up with all or most of the money and that the poor and middle class get a share in it the economy can only grow if everybody is playing their part and i fear if we didn't do it we would become like India or some other 3rd world area with virtually no middle class.
While I agree with my opponent that minimum wage can be harmful where small business is concerned I don't see how we cannot raise it $7.25 an hour is simply not livable anymore not with the cost of things. We have people barely able to make ends meet that with a higher minimum wage could make bills on time
Well as I said before, in the long term welfare creates inflation. So we put a higher minimum wage so that people can deal with a higher cost of living, and then it increases the cost of living itself. So it doesn't solve the problem, but creates an inflationary auto repetitive circle.
however I will argue that welfare is necessary and if done away with would lead a lot of people into poverty all you have to do is look at 3rd world countries to see that.
Well I would really like to know which 3rd world country your are talking about. Because many of them choose a socialist or close to socialist system (Venezuela, Iran, several African countries), and their economy is in despair. By definition, these countries have a very weak economic activity, not enough growth, and they need jobs more than unemployment benefits (whose governments cannot afford anyway).
Redistribution is absolutely necessary it ensures that the top 1% do not end up with all or most of the money and that the poor and middle class get a share in it the economy can only grow if everybody is playing their part and I fear if we didn't do it we would become like India or some other 3rd world area with virtually no middle class.
Well actually what is happening is that since our local and federal institutions is so much into debts (not only because of welfare I agree), that a lot of their spending is made to give money back to the bank. So basically you take money from the Middle-Class and small Businesses to give it banks (a bit like a reversed Robin Hood) . Since Obama was elected, efforts to increase welfare have been made, and the 1% have never been so rich and so close to have everything, than now.
What prevents us from becoming like India and some other 3rd world countries is that we have political stability, a class of entrepreneurs that tend to be less afraid to take risks and a way of life that still allow lower middle class to live properly.
FreedomHawk forfeited this round.
1 votes has been placed for this debate.
Vote Placed by pimpmaster 9 months ago
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Reasons for voting decision: Pro had much better arguments and explained position better. Not finishing the debate was in poor conduct. Neither used any sources. A source from myblog.com would have won those points... I don't feel Pro disqualified himself by not completing. The first 3 rounds were actually more informative than con's 3. 1 round for Con, 3 For pro....
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