Minimum Wage Should be Abolished

I thank Valladarex for the opportunity to debate a highly contentious topic. While it unusual to go first in a debate where I technically don’t have the burden of proof, I will have a chance to refute Pro’s argument in the next round. I will provide some arguments as to why Minimum wage should be implemented, which is slightly different from the resolution as I have the burden of proof in this instance. This is to outline my side of the argument, rather than set the tone of the argument. Anyway, I’ll stop prattling on… Increases the standard of living for the poorest and most vulnerable class in society Young, a working parent often not only have the demands of taking care of themself or his or her partner, but also a child/children. Evidently, it is not hard to imagine that some of the poorest people in America are young, working parents because they essentially support three people in a developed nation (higher standard of living costs than an undeveloped nation). “Analysis of the 2005 Current Population Survey reveals that the workers potentially affected by a minimum wage increase are mainly adults who typically work full time and provide significant income to their families. If the federal minimum wage were increased to $7.25 per hour by 2008, 14.9 million workers would see their wages rise. The vast majority (80%) of workers affected are adults age 20 and above. Twenty-six percent of these workers are parents, and as a result over 7.3 million children of low-wage workers would see their parents’ income increase if the federal minimum wage was increased to $7.25 per hour by 2008.1 From a historical perspective, this demographic portrait is consistent with the make-up of workers benefiting from the last federal minimum wage increase” (Bernstein and Schmitt 1998). Clearly, the minimum wage would vastly improve the situation for these parents, in turn dealing with the poverty to some extent. This is the fundamental reason to employ a minimum wage: to prevent people from living below the poverty line because businesses will pay people virtually nothing if they are allowed to. If people refuse to work for such a low pay, the business will simply not employ them or look for someone whom will (overseas if need be). It isn’t like there are only a handful of people whom a business can employ to do minimum wage work for them. Business exploitation and the Anchoring effect In theory, businesses would pay what they thought an employee was worth, so the incentive would be to work harder to get payed more. Keep in mind that this argument is about minimum wage, not high-end wage negotiation where there are few other potential employees due to the qualifications required. This theory is skewered in practice due to an effort called ‘the Anchoring effect’. The Anchoring effect occurs when someone bases the validity or worth of something by comparing other things of a similar nature within the vicinity (and is a fallacy because it works off relativity rather than objectivity). To put this into context, there is no way to objectively gauge what a person’s working time is worth (i.e. what is a person’s time worth if he or she is stacking boxes?). Arbitrary standards will be set, and will be (unfairly) set by the business (as there are no restrictions on them AND there is a conflict of interest for the business, the conflict of interest inciting exploitation because the bottom line of running a business is to make money). But here is where the fallacy comes in. Say I’m packing boxes full of clothing and getting payed $0.5 an hour. I’m doing a better job than the guy next to me, who is getting payed $0.3 an hour. So, logically, it would seem that I’m getting payed extra for my extra effort, right? This is below the amount necessary to sustain my life, but I’m told to ‘work harder’ if I want to get anymore pay. In reality, the business has set a very low standard, exploiting people by use of the anchoring effect and paying them less than what a person who sees the situation objectively would demand. This is another reason businesses must have minimum wages set by a separate entity (one which can see the situation objectively and can set objective standards, otherwise the business will set low wage rates which are unsustainable in a developed world (and make people believe that the rates are fair). To demonstrate exploitation in action (not necessarily the Anchoring effect in all instances), in 2006, “the earnings of a full-time minimum wage worker (working 40 hours/week, 52 weeks/year) with a family of three would earn $10,712 a year, thus falling 35.5% below the official 2006 federal poverty level of $16,600. Although the federal poverty line is an inadequate measure of the income needed to support a family, this comparison highlights the severe insufficiency of the current minimum wage” (Fisher 1999). I’ve outlined the crux of my argument and an important correlation. I don’t think I should go much further because in this argument, seeing that I’m Con, I’m supposed to counter-argue the arguments of my opponent. I will await your response, Valladarex. References Bernstein, Jared and John Schmitt. 1998. “Making Work Pay: The Impact of the 1996-1997 Minimum Wage Increase.” Washington, D.C.: Economic Policy Institute. Fisher, Gordon. 1999. “Income (In-) Adequacy? The Official Poverty Line, Possible Changes and Some Historical Lessons.” Community Action Digest. Vol. 1, No. 1.