The Minimum Wage

Thanks LaissezFaire. See my uncontested opening to round 1, as well as my opponent's clarification in round 2 that "we're talking about the world as it currently is" for confirmation that the resolution refers to the status quo. I am arguing that the minimum wage is overall a good policy now, not calling for it to be increased. I stated this at the outset and L-F only denied it in the final round. 1. Con questions why businesses wouldn't already be running operations at maximum efficiency. Maximum efficiency is of course unattainable. Unless products can be made instantly with no effort, there are always slight improvements that can be made towards an ideal of efficiency applied in gradual and constantly evolving increments. This is best illustrated by the Japanese business philosophy of Kaizen. [1] As already argued, those business owners that employ workers for the lowest wages are likely to be those who have short-term profits in mind and aren't running long-term sustainable business models. MW forces such companies to invest more in their lowest paid employees, and they are certain to get motivational benefits from doing so. Con continues to focus on the Locke evidence and has completely ignored the theoretical foundation behind this argument. His description of the Locke experiment is entirely accurate, but in no way negates the important point that Locke found financial incentives to be the most effective motivator in employment by far. Increased wages are a financial incentive. MW can create more competition for low paid jobs because with higher wages the jobs become more desirable, this also motivates employees more. Con continues to ignore process theory as well as the link I provided last round about the benefits that higher wages, promotion opportunities and other motivational investment in bottom end staff bring to businesses. 2. A lot of my argumentation is ignored here, Con returns to his position that unemployment only exists because of minimum wage. This makes little sense as within this point we are discussing the implementation of MW laws. Con's reasoning is that without MW, someone would always employ someone to do something. This is a bare assertion and an unjustified expectation. It's also proven categorically false by the fact that those US states where people can be employed for jobs at any wage frequently have some of the highest rates of unemployment for the whole US. With the shoe example, Con argues that the value of the design is set by the consumer rather than the fashion house. This ignores the fact that in most cases the head of the fashion house is the designer. Consumers who buy inflated designer products may claim they do so for style, it is clear however that they do so for status. It is the ludicrous prices of these garments that make them so attractive to a certain kind of consumer. They are purchased by people who want to wear their wealth in a way that is visible to others. Studies using identical products with different labels have shown that brands influence consumer's perception of price but not of quality. [2] 3. Con again dismisses the actual arguments and the theory that supports them with his focus on the technicalities of the Locke study. The relevant issue with the study was that it showed money to be the most effective motivator on performance. He seems to have dropped his argument about whether the minimum wage can raise wages. 4. The point about the variable nature of marginal productivity here is not just that the minimum wage itself can increase employee motivation (it can, as supported by a great deal of basic economic theory and other sources I've provided, as well as the Locke study L-F disputes the significance of). The wider point is that L-F presents employers as having only the option of firing people when he has effectively conceded that there are many other options available to them. 5. Con now claims "it doesn't matter" if employees have other options besides firing staff, when it has been the foundation of his argument that they don't. It is irrelevant whether employees would actually behave as I or anyone else might wish them too. The point is that they do have other options, contrary to the bare assertions of Con's premises which state that MW laws lead automatically to unemployment. 6. Con has indeed misunderstood my argument here. The conclusion that MW laws will lead to unemployment is void because of the flaws in the premises. The conclusion that MW laws can "only" cause unemployment would be an illogical one even if the premises were accurate. L-F has given no response to the other affects of MW I've talked about, the positive impacts on individuals with better pay, the economic investment these workers will put back into the economy by spending their new disposable income and the benefits to society as a whole that come from having happier, more productive workers. _______ Con now acknowledges that many job aren't covered by federal minimum wage laws, and that in some states (including the three with exceptionally high levels of unemployment that I pointed out before) no minimum wage at all applies to some workers. Regarding the distinction with tipped employees, the point is that the employer does not have to pay the minimum wage, which means none of L-F's arguments can apply. All Con has left to say about this example is that it is inconclusive. One thing it does prove conclusively however is that Con's conclusions about unemployment always resulting from MW laws (see 2) are entirely false. I have entirely accepted that the Card and Krueger study was a controversial one but also demonstrated that Con's attempt to portray a huge consensus against it is inaccurate. Just as the initial study attracted criticism from the likes of Neumark and Wescher, so their attempts to re-conduct it have drawn criticism from elsewhere. There's been a fair amount of confusion and dispute about the evidence and sources presented in this debate which I'll attempt to summarise now. Con has presented 2 sources that I've been unable to comment on at all, as I've no access to the books and there doesn't seem to be a copy available online. His other round 1 source I dismissed due to its obvious bias (a report commissioned by a business pressure group), as well as the contrast between the ambiguous claims of the article and my opponent's bald assertions. Con did not rebut this dismissal. He presented several examples which focussed specifically on the affects of MW on teenagers, a complete straw man, since I advocate MW laws which, like those in the UK have lower levels for younger employees. Of those studies that did seem on the surface to support some of his arguments, he made no reference to any specific examples to back up any of his individual points. Of the sources I've presented, Con has stubbornly disputed the evidence of the Locke study, a semantic issue for the voters to decide. He has completely ignored all of my links (and the arguments they supported) explaining basic principles of economic theory, along with the other ignored one noted above. The evidence about state employment rates he misinterpreted because he didn't understand the employment laws of his country. I think my links to statements by employers in big and small businesses who do support MW are entirely relevant since all L-F's points have been about the problems faced by businesses. Economists can study the theory but it is the businessmen who have to put it into practice. _____ This debate has led me to research this topic in depth for the first time and most of what I've learned has confirmed my previously held convictions. Thanks to my opponent for the opportunity to debate and thanks also to judges, voters and readers. [1] http://en.wikipedia.org... [2] http://ctr.sagepub.com...