The Case For the Minimum Wage

http://www.debate.org...Capitalism Demands Minimum Wages A guiding principle of capitalism states that every sector of the economy requires consumers who are willing and able to pay for goods and services. Businesses need money. And this means that they need customers. More specifically, they need customers with money.The dilemma for entrepreneurs is this: are employees an asset to the company that should be invested in and advanced? Or are they a liability and a risk that needs to be minimized? It is important to keep labor and overhead costs down, but these considerations are far, far less important in the long run than attracting a strong and spending customer base. An empowered and involved workforce is perhaps the single most important way for business to attract customers, and to build a sound business model.Simply put: businesses cannot survive long if most employers are underpaying their workers. Too many workers with inadequate wages create a death spiral of collapsing demand that will eventually crash every business that needs customers in order to survive. http://www.debate.org...Businesses need customers with purchasing power more than they need to reduce labor costs. The minimum wage sets up a system that removes the risk of one or two companies contaminating everyone else’s consumer base by impoverishing their workers. It sets a “Floor Price” for purchasing or selling labor and helps to ensure that most workers are also good customers. Does the Minimum Wage Cause Job Losses? No. The minimum wage has existed for 60 years, in many different countries and many different economic climates. [1] With the vast amount of data available, we can conclude that minimum wages help to increase employment, and to decrease joblessness. [2] By helping to prevent capital restriction, the minimum wage (and equivalent laws, such as collective bargaining rights in Germany) keeps money circulating into the hands of masses of potential new customers who then support expanded entrepreneurism. By transforming low wage workers into active members of the national consumer base, the minimum wage adds millions of new potential customers to the economy, thus creating new jobs to meet the rising demand.For example, the nations with higher minimum wages tend to have low unemployment rates, even in this poor global economy. Australia, for example, enjoys a high minimum wage at over $15 an hour, and a low unemployment rate, at 5.7%. [1] This is a common trend among nations that set a floor price on the buying and selling of labor. These policies create customers, which create jobs.Importantly, most minimum wage jobs are in the service and hospitality sectors, [3] which are impossible to ship overseas or outsource. Only a minority of employers are impacted with slightly higher labor costs as a result of the minimum wage. [4]The data that demonstrates this has been collected for generations. The chart below shows the unemployment rates for young workers (green line) All Workers (blue line) and the Minimum Wage (red line.) We see that there is no indication, over 50 years, that the slight rises in labor costs have caused mass unemployment. http://www.debate.org... Society Demands a Minimum Wage Every society has a certain minimum level of economic strength that each member must achieve in order to remain an asset to that society, and not become a burden.In the United States, for example, that minimum level of economic achievement (for workers in most regions) is around $15/hour. [6] Those who earn less than $15/hour are unable to obtain adequate levels of food, housing, and other needs in our society. That means that society has to come to decision about what to do with these people. It is in the best interest of the public to require that these minimum economic needs are met somehow - and asking that employers pay a fair price for the labor that they purchase is one important part of how a society can ensure that those who work can avoid poverty. The minimum wage helps to make work pay better than welfare. The public is going to pay tax money to prevent mass poverty. Therefore, society has the right to ask employers to pay their workers fairly if taxpayers are required to maintain the welfare system that could otherwise be relieved by fair wages. If the public were to choose not to help alleviate poverty within its society, then the public will be forced to pay to remedy the many negative effects that deep poverty can cause. (High levels of crime, disease among those who cannot afford health care, wage slavery and worker subjugation are all very expensive societal ailments.) [7]So taxpayers are left with the bill either way... unless employers are required to help out as well. Minimum wage laws are intended to ask employers to help create a society that has more members that are made self-sufficient through work, and not burdensome to the public, by paying a fair wage for the labor that they purchase from their workers.An Obvious ConclusionThe minimum wage causes a slight rise in labor costs for a few businesses. However, it also expands the customer base to include millions of new workers, and reduces the burden on the social safety net system by making work more attractive when compared to welfare, begging and creating a parallel economy for the poor. There is also no credible reason to think that it causes any important negative impacts such as unemployment or reduced investment. [1] http://www.abs.gov.au... [2] http://www.epi.org... [3] http://www.bls.gov... [4]http://www.bls.gov... [5]https://newscenter.berkeley.edu... [6]http://billmoyers.com... [7]http://www.americanprogress.org...