The Minimum Wage Should Be Abolished

Alrighty then! I'll be out of the country starting Friday - but I expect to be able to respond. I apologize in advance, however, if I miss a rebuttal. Thanks! In this debate I will argue that the minimum wage of the United States, currently at $7.25 with the federal level, is detrimental to the United States. I am not advocating a reduction in the minimum wage, but a total abolishment. My opponent must advocate in turn the minimum wage as-is; that is, at 7.25 or higher (depending on the state) _____ When look at the situation from a purely economic perspective, the minimum wage makes very little sense. By abolishing the minimum wage the US would most likely see an increase in GDP and a decrease in unemployment. The reasons behind this are relatively simple. When a business is forced to pay someone a set amount of money, they most often take a heavy hit. To pay 7.25 an hour for an unskilled, uneducated job such as mopping floors requires businesses to redirect money from more important things and other employees' wages to said unskilled job. D.W. MacKenzie, professor of economics at State University of New York -- Plattsburgh explains in an article for the Mises Institute (1): Employers pay a wage no higher than the value of an additional hour's work. Raising minimum wages forces employers to dismiss low productivity workers. This policy has the largest affect on those with the least education, job experience, and maturity. Consequently, we should expect minimum wage laws to affect teenagers and those with less education. Let's say an employer has three employees paid directly according to their job abilities – Employee 1 is under minimum wage, Employee 2 is at minimum wage, and Employee 3 is above it. If we suddenly increase E1's wage to the same level as E2's, despite doing the exact same job as before, a problem occurs. The employer has to lower E3's wage to compensate, or decrease his profit and harm the business that pays the wages anyways. Now, on a small scale, that's not problem. It's only a couple of dollars. However, if you multiply that scenario by 100 – and get a 300 person company, what would the have to employer do? Rather than take away from the E3's (whose talent they need) they will fire some of the E1's. It is in this way that the minimum wages harm the least skilled – an unfortunate reality in the US is that it adversely affects teenagers and ethnic minorities the most. Jobs are only created when an employer thinks that the total revenue outweighs the cost. Minimum wage increases those costs. Hiring an unskilled teenager at 7.25 an hour would not normally appeal to an employer, and thus, he would continue on without the job post. In a philosophical sense, minimum wages are bad because they interfere with the right of contract. A 1905 SCOTUS case, Lochner v New York, affirmed the right of an employer and employee to freely determine the wages and hours, no matter how low or high they may be, of a job. This decision was reversed in 1937. The freedoms to negotiate wages, etc, are the cornerstone of a functioning economic system, and the minimum wage absolutely destroys that cornerstone - contracts have the ability to allocate risks and problems that may arise (2). Contracts have the ability to allocate risks and problems that may arise (1) http://mises.org... (ï¿½ 2) (2) http://www.cato.org... (pg. 4, margin)