A mandated minimum wage does more damage than good.

Introduction: I wish to briefly define my position on this issue. For purposes of this debate, I am not considering whether the State should have the right to regulate trade. My general position on the use of power is that it is only just when used to prevent of greater use of power or to prevent an otherwise unavoidable catastrophe. I am not going to be weighing the potential costs and benefits in this regard but instead will be looking at the end result solely from a socio-economic standpoint. This seems a better way to respond to my opponent's method of argument and is more conducive to weighing the net costs and benefits. 1) Minimum Wage Hurts Employers. Despite my opponent's anticipation, I do not believe that any alleged greed is relevant to this discussion. I am going to ignore my opponent's preemptive defenses and move into the meat of this argument. My opponent's argument is that a business will not pay a worker more than the cost of his labor. If forced to, the employer will either reduce employment or raise prices. My main objection lies in my opponent's stated rationale for doing this: "to retain a satisfactory profit level." What is a satisfactory profit level? Businesses cannot justify paying workers as low a wage as they wish simply because they do not feel their profit margin is adequate. If a company cannot stay in business while paying its employees a livable wage than it will die and the market will expand to fill the void. If this cost must be passed on to the customer or compensated by reducing employment, than that my be the necessary way to handle it (as with other costs). It is unreasonable to justify any business practice on the basis that it will return more profit. Ultimately, the employer may lose productivity, customers, or the entire business. It would then be replaced by a better business that would be able to handle this (that is the one of the cornerstones of capitalism, after all.) This is true of any regulation placed on business to prevent them from becoming detrimental to society. Unfortunately, businesses sometimes have to take a hit for the greater good of society and this is one instance where it simply cannot be avoided. 2) Minimum wages hurt employees. The point of this argument is to suggest that employment is reduced by a minimum wage because employers will not pay workers more than they are worth. This argument then goes into the exact nature of the costs in order to explain why there will be a further bias against the young and menial labors, who are primary minimum wage earners. However, my opponent completes overlooks that fact that businesses cannot simply only hire employees who provide labor worth the minimum wage. Even if only one person at a restaurant preformed labor worth $9 an hour, the restaurant would not hire only one worker. Regardless of what the minimum wage is, companies will hire the number of minimum wage earning workers necessary for the business to function or they will suffer greater costs in reduced productivity. A study at UC Berkeley showed that there was no statistically significant effect on teen employment that could be correlated to the minimum wage and any small loss of hours was offset by the pay increase. (1) The study found that the higher minimum wage actually attracted more workers and reduced the overall vacancy rate (increasing employment). Businesses cannot simply leave job positions vacant because it is slightly unfavorable to pay workers the required amount because the loss of productivity will be far worse. To address Hazlitt's quote, I would like to point out that the phrase "deprive him of the right to earn the amount that his abilities and situation would permit him to earn" is extremely loaded. It suggests that paying a man more than he deserves is somehow a violation of his rights. If being paid less is a right than it is one I think any of us would gladly forgo. 3) Minimum wages hurt customers. For this rebuttal I will address first the claim about price increase to compensate costs, then the claim about price increase due to more consumer spending. First, generally speaking all costs in business are passed on to the customer. Once again, this does not been that any business regulation is automatically a bad idea. Businesses are typically regulated to confer social benefits (the minimum wage is an obvious example of this). Thus, the cost is socialized to all consumers. It is not significantly different than if there were no minimum wage and the poor were compensated an extra amount for their labor via a tax. However, the minimum wage is a much better way to handle this because it places the impetus to handle this on businesses. Businesses are more likely the reduce the effect on customers by increasing efficiency than the government because of their need to make a profit (which is another one of the cornerstones of capitalism). The point of society is that people suffer costs to benefit others so that they may in turn receive the same. It is necessary that those who work be paid a livable amount and the minimum wage is the best way to insure this. The second point is that if consumers have more money to spend, it will slightly increase prices overall. I have to wonder how this is a negative effect. Is my opponent arguing that anything that puts more money into the hands of consumers is to be avoided because prices may increase as a result? This is in no way a negative effect. 4) Minimum wages hurt society. My above arguments seem to counter this conclusion. The effect on business is a necessary side effect and anyway it is irrational to conclude that anything that hurts business must be detrimental to society. Employees are not hurt by the minimum wage because it does not reduce employment. Consumers are slightly effected, but the minimum wage is the most cost effective way to provide the necessary social benefit. The government is not arbitrarily mandating a wage that takes away the right to work, the wage is carefully considered so it can be set at the ideal value and it is businesses, not the government, that may elect not to hire workers as a result. However, businesses will need to hire workers regardless of the rates so the loss of employment is not great. The benefits to society, by contrast, are extremely obvious. The minimum wage ensures that those who work are paid enough that they are able to maintain a decent standard of living. If the minimum wage is too low, or does not exist, than there is no incentive for people to get a job instead of simply living off welfare. People who are hard working but in a disadvantaged position deserve to receive decent pay. To allow businesses to pay these people crushingly low wages is a great injustice against them. Furthermore, if there is no minimum wage than companies would logically reduce all their wages to maintain the pay structure in much the same way they increase their wages when the minimum wage goes up. This would hurt all low-wage earners and not just minimum wage earners. Removing the minimum wage would take money from the poor and put it in the hands of the middle and upper class (taking money from those who need in more and giving it to those that need it less). The only possible outcome of this is to increase poverty. I am approaching my character limit so I am going to stop there. I will develop more of my own arguments and bring in more of my sources in Round 3. Sources: (1) http://berkeley.edu...