Minimum Wage

Since BoP is shared in this debate, I will be presenting my case in this round of the debate. In the last round I will give rebuttals ONLY to my opponent’s original arguments while not defending my own, since it would be unfair for me to have the last word. ========== I. Minimum wage keeps companies form exploiting workers. A commercial company’s sole goal is to make money; the companies that don’t make money as fast as possible will fail, or be eliminated by other companies that make more money. Not all money-making techniques are ethical, and certainly not all are beneficial to the general society. For example: lying, monopolies, destruction of the environment, and exploiting workers. The easiest way that a company will exploit workers is by not paying them. Companies can simply pay just enough money to workers to keep them alive, and keep all the profit. This is clearly unfair to the workers. This especially hurts unskilled or low-skill workers, since these workers are in low demand and high supply, companies simply don’t care if they leave; the companies can easily replace these unskilled workers with other persons, or even machinery. As a result, these workers have no choice but to work like slaves. In early Britain and America, one of the first two nations to industrialize, brought the social issue of poor urban workers on the table. Various studies place average real wage increase in Britain between 30%~100% from 1780~1850 [1]; however, a lot of this was unevenly distributed and does not factor in environmental factors and standard of living [2]. After minimum wage was introduced in Britain in 1909, poverty was effectively reduced [3]; President FDR signed the Fair Labor Standards Act of 1938 into law as part of the Second New Deal to help get the U.S. out of the Great Depression [4]. It can be easily shown through statistical comparisons of minimum wage and income equality. It is the trend that income equality varies proportionally with minimum wage [5]. Of the 11 countries given in source 5 with higher minimum wages than the U.S., only one (Portugal) has a higher Gini index number than the U.S [6]. II. Minimum wage promotes progressive action from corporations and the general public. As production value increases due to advancements in technology, company production will increase, while worker wage will stay the same. This causes an overflow of goods on the market with no one to buy them. Increasing worker’s wages will also increase demand, since these workers will now have the means to buy the products that they made. This is better as opposed to prices dropping, since dropping prices mean deflation, and deflation stagnates the economy because no one will want to invest in goods; deflation encourages investment in worthless and unproductive cash. Having a minimum wage will also encourage employers to seek better and more efficient ways to do the job. Many machines were invented because employers simply didn’t want to use brutal human labor on everything. Investment in technology is a long term way to increase productivity. As more urban workers are unable to find low paying jobs that will barely satisfy their survival needs, they will realize that education is the only way out. A family that has a higher wage earner has more of an incentive to let a child to receive a better education, while a family that requires child labor to keep itself alive will not be able to afford an education. An educated society is a much more productive society, since they will invent more efficient ways to produce goods. Keeping the minimum wage high also increases quality in products. Since employers will now have to pay more per person, the quality to quantity ratio will increase. Quality is usually a better investment than quantity. III. Minimum wage has almost no negative effect on unemployment rate. Many people like to use the argument that Minimum wage makes employers more reluctant to hire since their work force now costs more. But that is simply not true. Even at minimum wage, an employer wouldn’t hire anyone unless they carried their weight. So, an employer earning a $7 profit per worker will have absolutely no incentive to hire less people even if he now only makes $5 per worker. In fact, if anything, the employer will now have to hire more people if he wants to keep a level profit. [7] ========== [1]. http://www.economist.com... [2]. http://economics.uwo.ca... [3]. http://onlinelibrary.wiley.com... [4]. http://en.wikipedia.org... [5]. http://upload.wikimedia.org... [6]. http://en.wikipedia.org... [7].http://www.cepr.net...