On the compulsory minimum wage

Debate Overview and Conclusion: -- Who we are talking about – "Today's consensus, in so far as there is one, seems to be that raising minimum wages has minor negative effects at worst … only 5% of the workforce – some 6.6 million people – will gain directly from a rise in the minimum wage, and 30% of those are teenagers …" [1] Basic arithmetic suggests that the minimum wage is therefore important to 70% of that 5% so affected – 4.62 million people. In the same article, the jobs lost by an increase in minimum wage are those held by teenagers, the very demographic the article claims are not reliant on the minimum wage. A discussion of the effects of eliminating the minimum wage is therefore limited to the effect on these 4.62 million people relative to the gain on balance. These people clearly stand to benefit from having a minimum wage, if they would benefit from an increase thereto. As noted in the article, there is little consensus amongst economists as to what exactly the minimum wage does. Of course, about half seem supportive. [2] Certainly for those already making the minimum wage, it has an impact. These are the people who could be thrown into poverty and would stir civil unrest in the event of an elimination of the minimum wage. The question must then be asked whether or not, on balance, the detriment produced through this unrest would be less than the public support that would result upon the minimum wage's elimination. I am still convinced that it would not. -- Limits of discussion – The resolution of this debate prevents either me or my opponent from suggesting ways the system could be changed outside the minimum wage. My opponent ignores this limitation when he attacks government as the primary source of union power's diminution. Unless unions are weak because of the minimum wage, for the purposes of this debate they are weak, period. Only 20% of industries in the US are unionized, [3] and unions are hardly gaining strength. [4] My opponent can not suggest that low wage workers would be protected by unions in the present environment. [5] I fail to find anything in my opponent's source that suggests that union participation would increase as a consequence of an eliminated minimum wage. "In that original state of things, which precedes both the appropriation of land and the accumulation of stock, the whole produce of labour belongs to the labourer. *1 He has neither landlord nor master to share with him … But this original state of things, in which the labourer enjoyed the whole produce of his own labour, could not last beyond the first introduction of the appropriation of land and the accumulation of stock. "[6] Smith goes on to state that the ‘natural wage' presently is one that is subject to abuse on the part of either side in seeking to maximize profits and that employers are more likely to gain from such a situation. The reasons Smith provides for these observations are somewhat mitigated by modern regulation, but not quite where monopsony or oligopsony reduce the influence of unions to nil, [7] or if unions are found to be weak, generally. -- Where my opponent is in error -- The increase in employment opportunities found in China and India was not due to the creation of new employers but rather the movement of old employers from one labor base to another. [8] New employers arise where there is economic opportunity and the employers have the skills and wherewithal to take advantage of that opportunity. [9] They do not arise simply because they could undertake their enterprise for less. An unoccupied economic niche needs to open for a new employer to appear and be successful. If my opponent is suggesting that low wage laborers would be better off with a pay cut reflective of the value found in international trade that is simply ridiculous. The comparative costs of labor/production are incredibly low. Time is the most valuable commodity any person has. [10] You can not make more of it. Asking a low wage laborer to sacrifice his time when such sacrifice would gain for him no more benefit than that possessed by an unemployed individual fully supported by welfare is nonsense. Welfare does not currently compensate a low wage laborer for anymore than, at best, what that laborer would receive if fully on welfare less wages. [11] Therefore, under the current system, using welfare in place of the minimum wage results in a disincentive to work. [12] Better to be in debt with your time than without. -- Where I was in error – Unemployment benefits: Clearly I used the wrong word: severance pay was meant rather than unemployment benefits. [13] Unemployment benefits themselves are not much of a buoy, regardless. [14] Savings are more important now than ever. Un-employment (rather than employment) and deflation: I used the wrong word (it was late at night, I was tired, and I had work in the morning), but the obvious intent of my refutation I will stand behind. Unemployment does not need to equal deflation because a producer will not lower prices, and therefore profit, if the employer's profit margin remains undisturbed, regardless of the unemployment/lower cost of production. Those in low wage service positions need not be the consumer base the company relies upon. Right now, that base appears to be the credit industry. [15] -- Conclusion and Sources – In conclusion, my opponent made a bold assertion by claiming that "in no case can a minimum wage have a positive effect. " I believe that I have shown that presently, barring a more significant overhaul of our economic system, the minimum wage succeeds in placating those on the minimum wage and preventing civil unrest. As this is a positive effect, please vote Pro. [1] My opponent's source 14/n14: . http://docs.google.com... [2] . http://www.aier.org... [3] . http://william-king.www.drexel.edu... [4]. http://news.google.com... and . http://www.aflcio.org... [5] . http://www.hrw.org... [6] . http://www.adamsmith.org... [7] . http://www.businessbookmall.com... And See . http://www.oligopolywatch.com... and . http://www-sop.inria.fr... [8] . http://www.businessweek.com... [9] . http://www.morebusiness.com... [10] . http://www.quotes.net... [11] Depending on the state. Welfare /= free money. You need to pay it back. Welfare has other problems as well – at present welfare doesn't supplement income the way my opponent thinks it does. This is debt, not income. Debt is not an augmentation of wages, as I see it. . http://www.pacode.com... [12] . http://books.google.com... p.87 [13] . http://www.boston.com... [14] . http://money.cnn.com... [15] . http://suddendebt.blogspot.com...