March Beginners' Tournament: The USFG should significantly raise the federal minimum wage

Defending my unemployment argument: One problem with Con’s argument that worker productivity will rise if minimum wage rises is that the two don’t have any correlation. Take for example the time period of 2000-2007 with worker productivity. Over that time period, worker productivity went up by 2.6% in the nonfarm business sector and 4.7% in the manufacturing sector yet during that time the minimum wage stayed at $5.15. Also notice that the time period saw some of the highest growth compared to other time periods. Now look at the 2007-2015 era and you will notice that productivity growth was half of what it was in the period before despite the fact that minimum wage rose by more than $2.00 during that time. [1] [2] If worker productivity and minimum wage really were correlated then you would expect to see the 2000-2007 era to have less growth than its 2007-2015 counterpart as the real value of the minimum wage shrunk due to inflation over that period and vice versa. On to the issue of employee turnover. Let me first point out that employee turnover isn’t necessarily a bad thing. Employee turnover is good for the company and the economy if:A low performer leavesA person who is toxic to the work environment leavesA low performer or average performer gets replaced by a high performer This brings me to the point of price-out theory. By artificially increasing the value of the job, the employer would look for employees worth more than the job who are often skilled workers that are often not in poverty. Take for example at McDonalds, if you have an applicant who is a college student in an engineering major who can fix machinery versus a high-school dropout in poverty, the employer is now less inclined to give the job to the high-school dropout. It would be such scenarios such as these that increasing minimum wage wouldn’t help those in poverty ultimately defeating the purpose of it. Large corporations can also easily afford to replace minimum-wage workers with automated machines. With the CBO report, while 500,000 jobs makeup 0.3% of total jobs in the United States [4], take into account that there are 1.3 million jobs in the US that pay at the US federal wage [3]. Since this is minimum wage, it is safe to assume that most of the job loss will be at minimum wage jobs. That is around 38% of total minimum wage jobs in the United States. If their estimates line up with other researched papers that state their methodologies, there isn’t too much need for concern as you still have those papers to fall back on. If the report is an outlier, then there would be a much greater need for concern. You criticize the methodology of the the papers in which the study derives its numbers from but never go into detail what his argument is or why we should accept his critique. You attack my claim of historical wage hikes for making a false analogy between introduction and increase of the minimum wage. Yet you could also look at it as an increase from $0 to $0.25. Also even before the implementation of the minimum wage, there was still a sort of “de facto” minimum wage which is what the job is worth. Since the abolition of slavery after the Civil War, employers are required to pay their workers something, otherwise why would someone take a job. If you look closer at my figure for Puerto Rico, that study was talking about unemployment during 1938 [5]. The study you brought up covered unemployment in Puerto Rico since the year 2000. Case closed “Multiple studies have found minimal to no negative impact on employment prospects as a result of minimum wage hikes” Yet a study by economists David Neumark and William Wascher found that most studies came to the conclusion that raising the minimum wage would have a negative effect on employment.[6] Also note that Pro hasn’t disputed my arguments about mechanization taking over the minimum wage workers. Defending Argument 2: First off, Pro blatantly misrepresents the CBO report. It is not 16 million families but rather workers. He also misrepresents the number of people who would predictably rise from the poverty line. Instead of millions as Pro suggests, the figure comes at around 900,000 directly from the report [4]. Also from the CBO report is that average annual family incomes would only increase by a measly 3% from this increase. This just proves my point that raising minimum wage is a ineffective way to help those in poverty.[4] Sources: [1] http://www.bls.gov... [2] http://www.dol.gov... [3] http://www.bls.gov... [4] https://www.cbo.gov... [5] http://object.cato.org... [6] http://www.nber.org...