The minimum mage should be abolished

Round 2 Rebuttal Regarding the Consumption, the Efficiency Wage Hypothesis, and Income inequality sections, my opponent makes the case that increasing wages for low-wage earners and reducing inequality would be beneficial to society. I do not dispute this point and am not making the case that inequality and poor wages for low-wage earners are desirable. ResponsiblyIrresponsible does not explain why or how the implementation of a legally enforced minimum wage is necessary or the best option in increasing the wages of low-wage earners and reducing inequality, and he or she does not consider or address other non-governmental possible ways of achieving these goals such as collective bartering or unionizing. Again, I am not suggesting that increasing wages for low-wage earners and reducing inequality are not desirable. I am arguing that the minimum wage should be abolished and considering the fact that there are other non-governmental options which can work towards the same goals the minimum wage was designed to reach more effectively. Points regarding Minimum Wage:1. Job Losses: Ever since the implementation of the Minimum wage, evidence of job losses was observed. The first 25-cent minimum wage introduced in 1938 resulted in significant job losses. Minimum wage increases in American Samoa resulted into adverse and detrimental effects. A 2006 review of more than 100 minimum wage studies by David Neumark and William Wascher found that about two-thirds found negative employment effects. In 2010, Joseph Sabia and Richard Burkhauser estimated: “nearly 1.3 million jobs will be lost if the federal minimum wage is increased to $9.50 per hour.” 2. Effects on low-skilled workers: Evidence shows minimum wage increases substantially hurts the very people they were designed to help. The 2006 Neumark and Wascher review found the literature “as largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers. A 2012 analysis of the New York State minimum wage increase from $5.15 to $6.75 per hour found a “20.2 to 21.8 percent reduction in the employment of younger less-educated individuals. A 2010 analysis by Michael J. Hicks found: “the latest round of minimum wage increases” account “for roughly 550,000 fewer part-time jobs,” including “roughly 310,000 fewer teenagers working part-time.” 3. Reducing Poverty: The minimum wage doesn't reduce poverty. In the previous federal minimum wage increase from $5.15 to $7.25, only 15 percent of the workers who were expected to gain from it lived in poor households, according to a 2012 Wilson review. If the minimum were today raised to $9.50, only 11 percent of workers who would gain live in poor households. The 2012 Wilson review noted: “Since 1995, eight studies have examined the income and poverty effects of minimum wage increases, and all but one have found that past minimum wage hikes had no effect on poverty.” The 2012 Wilson review noted: “One recent academic study found that both state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates.” 4. Who Pays? Someone has to pay for increases in the minimum wage. The 2012 Wilson review noted: A 2004 “review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent.” A 2007 study from the Federal Reserve Bank of Chicago found that restaurant prices increase in response to minimum wage increases. 5. Detrimental effects of the minimum wage oversees and other options. There are seven European Union countries in which no minimum wage is mandated (Austria, Cyprus, Denmark, Finland, Germany, Italy, and Sweden). If we compare the levels of unemployment in these countries with E.U. countries that impose a minimum wage, the results are clear. A minimum wage leads to higher levels of unemployment. In the 21 countries with a minimum wage, the average country has an unemployment rate of 11.8%. Whereas, the average unemployment rate in the seven countries without mandated minimum wages is about one third lower — at 7.9%. Many of these countries however have organized labor which engage in collective bartering. 6. Income Inequality: Let's observe the gini coefficient of the nations in the European Union without a mandatory minimum wage and the European Union overall. (Austria - 0.26 Cyprus - 0.29 Denmark - 0.24 Finland - 0.269 Germany - 0.306 Italy - 0.36 Sweden - 0.25). The average gini coefficient of all members within the European Union is 0.305, so nations within the European Unon without a mandatory minimum wage are on average more equal than nations which have a government set minimum wage. A minimum wage is not necessary for a relatively economically egalitarian country. Of course many individuals in these nations are involved in organized labor and organized bartering, but there is no legally enforced minimum wage. Sources: http://object.cato.org... http://www.nber.org... http://www.cato.org... http://www.people.vcu.edu... http://www-rohan.sdsu.edu... http://cms.bsu.edu... http://data.worldbank.org...