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

Point IThe actual purchasing power of workers' wages has been stagnating (and in some cases, even decreasing) due to the effects of inflation[1]. The de-facto loss in wages' purchasing power can be confirmed through the Bureau of Labour Statistics' website [3].An analysis by the Pew Research Center found that the actual purchasing value of the current minimum wage is much lower than that of the minimum wage in 1968[2]. In order for the minimum wage to have the same purchasing power today as it did in 1930, it would have to be raised to at least $10.20 per hour [4].Point II: Economic stimulationA minimum wage hike would give workers more money to spend. Due its disproportionate effects on lower-wage workers, nearly all of the new money would be guaranteed to be spent. Data has confirmed that a higher minimum wage would boost consumer spending, which would in turn increase demand and stimulate economic growth:In 2011, the Chicago Federal Reserve Bank examined[5] 23 years of household spending data and found that every dollar added to the minimum wage resulted in $2,800 increase in individual consumer spending.Additionally, the Economic Policy Institute found[6] that increasing the minimum wage from $7.25 to $10.10 dollars per hour "would result in a net increase in economic activity of approximately $32.6 billion over the phase-in period and would generate approximately 140,000 new jobs."Point III: Good for native workersIt is well[9] established[11] that a higher minimum wage leads to a decrease[11] in low-skill immigrants. In fact, this is very likely why Switzerland debated raising its minimum wage to $25[10].Some may argue that (at least, legal) immigration is beneficial to the US economy, citing popular economic opinion. However, more in-depth analysis has revealed[7] fundamental flaws in economic studies which found no negative economic impact from increased immigration:"If you assume that all low-education workers are potential substitutes for each other—the 23-year-old recent arrival from Guatemala with the 53-year-old who proceeded from high school to the Army—then your model will show a less dramatic effect of immigration on wages. If, however, you assume that the 23-year-old Guatemalan is competing with 20- and 30-something native-born workers who lack diplomas, then your model will show a very big effect." "A model based on unrealistic assumptions can still achieve perfect internal consistency. It just won’t describe the real world very accurately. Which seems to be precisely what is happening with immigration economics." The negative impact immigration has had on the prospects of native workers can be confirmed by looking at government employment data[8]: "In March 2015 the working age population had grown by nearly 15 million to 204,026,416, which is in line with the 10.6 million new immigrant workers, but population grew to nearly 320 million and the EPR fell to 59.3.That works out to 120,987,665 jobs, which is a mere 24,367,681 fewer jobs than the NBER model predicted. From 2000 to 2015, 16.4 million new immigrants have created a grand total of 5,832,319 new jobs, which means that either a) over 10 million native Americans have lost their jobs to immigrant labor or b) over two-thirds of the new immigrants are collecting welfare. Either way, these 16.4 million immigrants have not been a boost to the economy." Native workers would not only see their wages rise, but would have a much easier time finding work. This would particularly beneit low-skill workers.Amidst concerns of intervention in the functioning of the free market, it must be kept in mind that it would be absolutely ridiculous for a pseudo-democratic government to act against the best interests of its people. If a government will not protect its people, what exactly is it good for?Conclusion:I have demonstrated that raising the minimum wage would correspond with inflation, help low-earning workers, provide economic stimulation, and increase the purchasing power of actual wages. Additionally, the case for a minimum wage can be extended beyond the purely economic, as it functions as de-facto immigration control.Sources:[1] http://www.epi.org...[2] http://www.pewresearch.org...[3] http://www.bls.gov...[4] http://www.mybanktracker.com...[5] http://www.chicagofed.org...[6] http://www.epi.org...[7] http://www.theatlantic.com...[8] http://voxday.blogspot.com...[9] http://www.economist.com...[10] http://voxday.blogspot.com...[11] http://economix.blogs.nytimes.com...