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

Rebuttal Point 1: (The argument with no name) The main problem with this argument is that minimum wage plays a contributing factor to inflation. If you increase the minimum wage to the level proposed, it would only increase inflation, quickly and effectivly downplay the acutal purchasing value of the minimum wage. I elaborate this point more in my Point 2 rebuttal. Point 2: Economic Stimulation With the proposal to increase the minimum wage, businesses will have to shift to account for the increased labor costs. According to a paper by Péter Harasztosi and Attila Lindner, that cost primarily is pushed on to the consumer in the form of higher prices [3]. There is empirical evidence that such costs are pushed on to the consumer. Restaurant prices have been found to have positive correlation to the minimum wage in a paper by two senior researchers at the Federal Reserve Bank of Chicago and a senior researcher at the Economic Research Service [4]. In another study that looked at the effects of a minimum wage increase from $4.25 to $5.15 in California found that, "The federal increase from $4.25 to $5.15 costs California families an average of $133 more per year for the goods they normally purchase. Since higher-income families spend more, they would pay more in absolute terms than lower-income families: up to $234 per year compared to $84 per year." [9] The new found money that minimum wage workers will receive, shrinks as a result of the inflation that accompanies minimum wage increases. Even though people spend more with wage hikes, the effects are not as clear cut. Aaronson and Eric French of the Chicago Federal Reserve Bank discovered that the money that was spent in response to a one dollar wage hike was often borrowed as such workers took on more debt [1]. Having households in America accumulate debt is not good for the economy because as debt grows, families have to spend less or risk default which wouldn’t be good for the economy [5]. Harvard University economists Carmen Reinhart and Ken Rogoff came to the conclusion that rising household debts are the precedent to economic crisis. Another team consisting of economists Atif Mian and Emil Verner of Princeton University and Amir Sufi of the University of Chicago points to household debt as a source of instability and lower economic growth. They also connected such household debt to the 2008 economic recession.[2] As stated, in my previous argument, there will be many people who would be unable to spend their raised wages because they are out of a job. With the calculated job losses associated with the new minimum wage, the GDP is calculated to be decreased by 47 billion dollars. [6] Point 3: Good for native workers I’m not necessarily sure what point Pro is trying to make here. As the point I have made in my previous argument, raising the minimum wage would cause unemployment. It seems that Pro indirectly concedes this point, instead the unemployment would instead be shifted to the immigrants. Statistically, immigrants make up more of the poverty population than natives [7]. Minimum wage is supposed to help alleviate poverty and what Pro advocates is that we make income inequality even worse by discriminating against poor immigrants even the 6.6 million that became naturalized over the last decade [8]. Shouldn’t we also look out for these people too? Sources: [1] https://www.aeaweb.org... [2] http://equitablegrowth.org... [3] http://faculty.chicagobooth.edu... [4] http://davideharrington.com... [5] http://money.howstuffworks.com... [6] http://www.heritage.org... [7] http://www.migrationpolicy.org... [8] https://www.uscis.gov... [9] "Increasing the Minimum Wage" Public Policy Institute of California, May 2000.