The Minimum Wage Creates Unemployment

Unemployment: the state of being without a paid job, But being both available to work and of working age. I will stipulate that for this debate, Voluntary unemployment--choosing not to work--will be left out of any description of unemployment. Opening Argument:The minimum wage is a statutory edict which sets a designated price floor in the market for labor. That is, It sets a minimum amount payable to employees by employers. It should be noted that the minimum wage does not ensure employment. It requires only that employees hired be paid, At minimum, At that price floor. Of course, Discretion is still left with hiring. But what about those employees whose skill and labor when gauged don't match the minimum wage? More to the point, If we are sure that there's labor and skills that when gauged are worth far more than the minimum (i. E. Doctors, Lawyers, Engineers, Etc. ) then is it worth considering that there are labor and skills when gauged are worth far below the minimum? How Are Wages Determined? The theory of marginal productivity delineates that the wage is determined by the the supply and demand for labor upon one's marginal productivity, Particularly Marginal Revenue Product--revenue earned from selling a product. Firms determine the amount of labor they employ using the concept of the Law of Diminishing Marginal Productivity, Which describes a point of maximum output for a given input. So for example, And I'll use an example which was taught to me: let's say that I'm a professor in a college class, And I need help erasing an entire board. Now if I ask two students for help with this task, We can get that board erased in much less than time than had I done it myself. Now let's say I ask a total of four students to help me. That in theory would help perform the task quicker. And I would have four erasers, So it would work out well. Now what if I were to ask 10 of my students? 20 of them? This time, Not only do we have a space issue--assuming a standard sized black/green/white board for a standard sized class--but we also lack tools necessary since I have only four erasers. Now I can acquire more erasers, But that will cost me money, Or time I've could've spent erasing the board. So the point is essentially this: at a certain point, You can enlist too much labor, So it's up to productivity managers to determine the amount of labor necessary to perform a task efficiently, As well as the output generated by each worker. This determines the wage. (There are other factors of course, But for simplicity's sake, I submit this rendition. ) So if one is paid for example, $10 per hour, That means that his or her labor/output/product generates commerce at $10 per hour. So as a thought experiment, Think as to why an NBA superstar gets paid over $200 million a year and a teacher doesn't? Because the NBA player generates commerce (ticket sales, Commercials, Merchandise, Supplementary products--food, Drinks, Etc. ) at a rate of $200 million per year (maybe more? ) How the Minimum Wage Creates Unemployment? Because the minimum wage is a price-floor it creates a distortion between the supply for labor and the demand for labor. Naturally a minimum wage will appeal more to the supply side of labor rather than the demand for it. That is, At the minimum wage there's more supply in labor than there is demand for it. So if a person has a marginal productivity at $7 per hour rate (i. E. The commerce generated by a person's output amounts to $7 per hour) but policy requires that person be paid $15 dollars, Then the employer is incurring a surplus cost of $8. Would that increase or decrease the demand for labor? Law of demand would suggest that it would decrease since price and quantity demanded have an inverse relationship. To address this prospect in increased costs, The employer will demand less labor or reduce his current labor (underemployment--reduction in hours--or disemployment--fire employees. ) And as I mentioned above, The minimum wage does not ensure employment. So what does the minimum wage in effect do? The minimum wage makes illegal the employment of those whose marginal productivity falls below the price floor--labor which would be typically be found in low-skilled or unskilled work (e. G. Cashiers, Cleaners, Maids, Etc. ) Now, Some may take issue at a person making less than $15 per hour. Let me ask: what issue does one take at a person making nothing? I'll illustrate my point using another example: let's say I'm a club owner, And the state imposes a policy where those under the age of 25 can no longer frequent clubs. Does this mean that there are going to be more of these people above the age of 25 who will frequent my club? (Maybe my club isn't that popular among that age group? ) Or does it in effect make it illegal to allow those under the age of 25 in my club? If the concern in my community is that "not enough people are going to clubs" then why are we segmenting portions of club-going and making it illegal? It's the same with unemployment. If the government wishes not to create unemployment, Then why is it prohibiting forms of employment? Here's a model which explains the conceptual effect of the minimum wage on supply and demand in the labor market: (I will place the link in the comments section since debate. Org won't let me post the link. )But what about the research which states that increasing the minimum wage doesn't worsen unemployment? It's true that some research argues that marginal increases in the minimum wage has presented no substantial worsening effect on unemployment. Some studies go as far as to allege that the minimum wage has reduced unemployment. But this research does not address the fact the minimum wage creates unemployment, Only whether it's made worse. So using my analogy above, It would be akin to raising the age limit from 25 to 25 and 6 months, And seeing no substantial effect on those who don't frequent my club since the last policy. Remember that the minimum wage still makes it illegal to employ workers at its designated price floor. It's essentially placing a tax on the consumption of labor. And we see this in government policy many a time (e. G. Tax on cigarettes. ) The government has expressed policy which aligns with a downward sloping demand curve (inverse relationship between price and quantity demand) and provides tax as a disincentive. Would the logic as it's expressed in effect not be the same when taxing the consumption of labor (i. E. Imposing a minimum wage? ) I now give the floor to my opponent.