Raising Minimum Wage Damages the Economy

The Effects of Minimum Wage Increase Unemployment"My opponent, however, fails to demonstrate why this increase in unemployment should be attributable to the increase in minimum wage, particularly when the economic collapse occurred at the exact same time."The response to this comment is simple. Here is a quote from a good source responding to my opponent's statement:"In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result." [1] This clearly shows that raising the minium wage is a negative, not a positive. My opponent then cites his own numerous studies which conclude that raising the minimum wage does not hurt the economy. A meta analysis is needed (a look at a large amount of studies). The meta analysis will show that a there is a large consensus in favor of either me or my opponent's arguments. The Joint Economic Committee has done over 50 years of research on this subject and has found that a consensus favors my arguments:"Historically, defenders of the minimum wage have not disputed the disemployment effects of the minimum wage....[studies finding minimum wages having no effect] were exhaustively surveyed by the Minimum Wage Study Commission, which concluded that a 10% increase in the minimum wage reduced teenage employment by 1% to 3%."Years of research find minimum wages reduce employment. Some studies include Currie and Fallick (1993), Gallasch (1975), Gardner (1981), Peterson (1957), Peterson and Stewart (1969). Interestingly, minimum wages are supposed to increase wages and help the poor, however studies fail to demonstrate this. Rather, they find minimum wages hurt the poor [see: Brozen (1962), Cox and Oaxaca (1986), Gordon (1981).] Further, small businesses are vital to an economy. They literally drive our economy. But the high minimum wages hurt them [see: Kaun (1965).]Reed Garfeild, a Senior economist for the Joint Economic Committee Report, notes that 200 years of research demonstrates that a minimum wage destroys job creation. Many reports in the 1990s created an economic "revelation" because they argued an increase in the minimum wage had no effect. However, attempts to replicate these findings failed miserably. Not only is it nearly a fact minimum wages increase unemployment, but also evidence shows that minimum wages increase the amount of time a family spends on welfare and the amount of high schoolers that drop out of high school. [2]Another graph. The 1990s, considered a time of great economic growth, also had the same troubles with teenage employment and the minimum wage: My Opponent's ArgumentsMy refutations to my opponent's refutations on my original argument has refuted my opponent's two new arguments. The Joint Economic Committee has found that no job growth has been created. "One dollar in increased minimum wage results in $2,800 in new consumer spending per person over the year, and would inject as much at $60 billion into the economy."What if minimum wage increases to $1 million dollars? Will that stimulate the economy and increase growth? I don't think it will increase productivity (referring to my opponent's second argument) if its that high.Further, for my opponent's theory to work, we must assume wages are higher so they have more money to spend. However evidence simply does not add up. Amongst younger employees, income drops due to increases of the minimum wage [(Meyer and Wise (1983b)]. And, due to the fact the minimum wage hurts young, unskilled, workers, this leads to them not gaining experience. This causes them to have worse skills (and be more effected by the minimum wage--less likely to get a job) and make them earn less in the future. And even if they get a job, they will be less likely to make large profits as the minimum wage prevented them from getting basic experience (Brozen (1969), Feldstein (1973).). [2]Reed Garfeild puts it like this:"To put this gain in perspective, each minimum wage worker who earns $4.25 an hour brings home $3.92 for each hour worked once payroll taxes are deducted. The employer costs of a minimum wage worker is $4.58 an hour when the employers share of the payroll tax is included. If workers could take home the amount of money it costs the employaer to hire workers, they could have 62 cents more per hour. Clearly, the California parent would be better off if the tax wedge were reduced, rather than increasing the minimum wage."ConclusionI have proved that minimum wage hurts employment for everyone, specifically teenagers. If minimum wage goes up then teenage unemployment will skyrocket higher. I have refuted my opponent's arguments that minimum wage creates job growth, economic growth, and productivity. Raising the minimum wage at this time, or any other time,would hurt the economy. [3]Sources1. http://www.lewrockwell.com...2. http://web.archive.org...3. http://web.archive.org...