The Government Should Eliminate the Minimum Wage

BOPFirst off, I note that BOP is shared. However, due to the nature of the way minimum wages (MW) work I think we can all agree on the framework of evaluation. I submit to the judges of this debate that if my opponent shows that MW harms employment chances, and as a result the greater economy then my opponent should be given the win. Likewise, if the MW shows to have no impact, OR good impacts then the judges must give me the win. The reason why is because if MW laws have no impact on the economy then there is no logical reason to not give those workers a raise in the first place. No impacts means that change to the status quo would be justified; it has no implications in the first place, and the consumption function of MW shows that more disposable income = more consumption which generates economic activity, and correlates with shared prosperity. -- http://en.wikipedia.org... I also note that I cannot refute any claims my opponent makes directly in this round, so I shall just make my case:Consumption in the Economy ImprovesAs noted before, when incomes increase consumption also increases. In mainstream economic theories this is an accepted fact. The only thing in question is to what degree does the consumption increase to? Milton Friedman, a practitioner of Neoclassical thought seems to agree with this view that temporary increases do little impacts, but permanent does have great consequences. Keynes having created the consumption function also agrees. In short, this is one of the few times polar opposite economic thoughts actually agree with one another. Increasing the MW increases consumption to those who are impacted. -- http://en.wikipedia.org... (and above cite)Unemployment Figures are Deceiving HereRecall that in economics, an unemployed fellow is considered unemployed when two conditions are met:1) That person does not have a job and2) That person is actively looking for a jobSo, if a person does not have a job and is not looking for a job, then this person is not considered “unemployed” by economic definition. This is important: this means that if someone where to simply show a table of unemployment figures and MW figures and show unemployment goes up, they ignore the fact that MW increases makes those who are economically alienated to look for a job again. This means that even though unemployment is going up, it is not because MW is killing jobs as implied by the stats, but because increasing it makes more people actively look for a job. The OECD has ample studies on this: -- http://www.oecd.org... The Gini Coefficient and Income Inequality One key thing the MW is excellent at is no doubt fixing income inequality. It was originally used in the New Deal as a tool to correct this issue, and has been around since in the US. Interestingly, the US not only has one of the lowest rates in the developed world for MW, but also has one of the worst levels of income inequality. With this the consequences are huge: crime rates sky rocket, social cohesion is eroded, people turn to the “shadow” economy, drains the welfare system, etc... Interestingly enough, MW actually helps prevent this. This is not only shown through the Gini coefficient, but Atkins Indexes, and even Standard Deviation Logarithms. In short, the MW has been one of the most effective resources for correcting a fault in the invisible hand of the economy. -- http://are.berkeley.edu... -- http://www.oecd-ilibrary.org... SourcesThis is probably one of the most one-sided debates of all of economics. I would like to point out some things to watch for within this debate. Essentially, think tanks ought to be looked at with great scepticism. So the Von Missis institute, Wall Street Journal, Cato Institute are all ideological and ought to be rejected. They're unreliable as they have an agenda in-behind them. Their studies are nothing more than confirmation bias about their own ideologies (either libertarian or republican). WSJ for instance, is owned by Rupert Murdoch, so unless the audience thinks Fox News is unbiased, this debate needs to agree on legit sources as opposed to ones that have a clear bias. Let's use more reliable sources (OECD or peer reviewed data for instance)-- http://en.wikipedia.org... With this being said, the biggest study ever done on this debate was the Card and Kruger studies and Meta-Analysis. Similarly, the other biggest studies are done from Berkeley under Robert Reich, and Alan Newark (who agreed, then disagreed, and then his studies were classified as junk) who refutes Kruger and Card. The best way to see how MW impacts an economy is compare one state with another with the input, and one without the input while all else is the same (ceterius paribus). They did this and found that MW increases are correlated with increases in jobs. Furthermore, meta-analysis is taking on all data (done years later) that's peer reviewed and draw a common consensus from all the data (is MW good for the economy or not?). What they found was that the data favoured dis-employment impacts, until publication bias was corrected, then the peer-reviewed data had no evidence that dis-employment occurred. Furthermore, when the publications using faulty T-stats were also eliminated, no evidence exists that MW hurts jobs. At all. As one academic by the name of Thomas C. Leonard noted about the con-MW side (which ignored the T-stat issue) “the silence is deafening!” So we can conclude that MW does create jobs, and that studies claiming to the contrary are either bought off, or do not meet the statistical requirements to be known as reliable. (For those interested: a t-score is the same thing as a z-score, the only difference is when it is impossible to be exact we use a t-score, whereas z-score is either representative, or utilizes a sample. So, because both scores are the same, when the study says 0.05 it means the study is accurate by 95%, so the results are give or take 5% which is the standard, similarly a score of 0 is 100% representative with no margin of error/full confidence. Those studies refuting MW either had NO t-score, OR had a score of 2, meaning -200, or “junk science” qualifications. Those studies with a score of at least 0.05 are pro MW)-- http://en.wikipedia.org... -- http://en.wikipedia.org... Economic Theories Finally, I would like to note that the two mainstream economic theories are Neoclassical, and Keynesian thoughts. Although there are some sub-sections within those two thoughts (New-Keynesian for instance), these two thoughts are the dominant ones. We could have a separate argument about which theory is “more correct” including heterodoxal theories, but I propose to the audience we must stay within these two thoughts, as Austrian economics, Post Keynesianism, Marxisism, etc... are all known as heterodoxal and not rooted in factual analysis of the economy. Otherwise, my opponent not only has to justify his position, but I would also propose he has to justify his Austrian position when a clear majority of economists reject this economic analysis. -- http://econfaculty.gmu.edu... Recap:-- MW only accounts for 6% of the population, of which Retail, Hospitality, and Restaurants are impacted the biggest-- Increasing MW = less spending on welfare, and less crime due to a lack of ppl in the shadow economy -- Peer-reviewed data indicates that a correlation with increase in jobs occurs in states increasing MW-- labour force participation increases when MW increases, thus accounting for deceiving “unemployment” figures -- Only Austrian economics (rejected in mainstream) preaches for abolishing MW-- Consumption improves, along with income inequality and social cohesion-- Finally, minorities are impacted... get a pay raise.I shall leave you with an interesting thought experiment to see why MW does not kill jobs. Suppose we grant for a second that raising costs to businesses through labour costs was true in determining if a business would hire/not hire someone. It would mean businesses would look for "free" labour. I can think of one: internships! Why isn't, say the XL Keystone Pipline being built entirely out of internships for free instead of businesses paying them? Any business can do it, yet we never see a Wal-Mart offering internships to casheirs ... strange. Here is an article for you to enjoy .. it is sarcastic humor, though I found it to be funny in light of this topic and proving my point!http://www.thebeaverton.com...;