The Minimum Wage Creates Unemployment

Rejoinder "this is justified by an assumption that the firm is profit-maximizing" So the theory assumes that companies want to maximize their profits. This means that the price floor mentioned earlier does not destroy a business if crossed. " This is clearly a non sequitur. No one has stated that the minimum "destroys a business. " Once again, The proposition over which we argue "The Minimum Wage Creates Unemployment. " "We cannot just assume that employers will lay people off just because their profits are down a bit. " No one assumed that employers will lay people off just because "their profits are down a bit. " That's the reason I cited the model (in my photo album) which demonstrates the concept of profit-maximization, Which considers the costs of inputs, The price, And output over the short and long term. That is, Should the imposition of the minimum wage not necessarily reflect the output generated by the employees, Then the commerce generated by the employees will be lower than the cost to employ them, Resulting in losses. Hemorrhaging money as a long term strategy results in huge losses, Usually resulting in the loss of one's business. "Those are the same thing, If unemployment goes up, Then that means it's getting worse. And you're right when you said that some studies go as far as to allege that the minimum wage has reduced unemployment. " Non sequitur. I did not state "Unemployment goes up" which implicitly relates quantity; My proposition states that "unemployment is created. " That is the minimum wage creates a distortion between the supply of labor and the demand for it (i. E. Surplus labor) However, Perhaps I can illustrate this point with the concept of the "Maximum Wage, " a regulation which was actually imposed (but not well enforced) by British Parliament under Queen Elizabeth I in the Statute of Artificers of 1563. Now suppose we impose a maximum wage (a price "ceiling" rather than a price "floor". ) The government passes an edict which sets a price ceiling at $8 an hour--to use your example. What does this in effect do? It makes illegal to hire those whose marginal productivity falls above the price ceiling--i. E. Those who make $8. 01 and above. Does a person incur a quarter million dollar debt, For example, In medical school just to make $8 and hour? What does this do the medical profession generally? The effect is identical with the minimum wage, Except instead of a labor shortage, There's an excess in labor. "Do you have any evidence that it's irrelevant. Because you can't just say that without any evidence. I have to show my why. The whole point is to show how high the stakes are if we remove the minimum wage. " Because the subject of our debate is once again, "The Minimum Wage Creates Unemployment. " We are not arguing its removal; We are not making policy prescriptions. We are debating the aforestated proposition. "So if you want us to make this huge change. . . " I want only to inform, Support, And substantiate my proposition. You must inform, Support, And substantiate your contention. Making a "huge change" has nothing to do with it. "Any prediction that anyone would make is a speculation, Including your prediction that removing minimum wage will create jobs. We're in the same boat. " Not in the slightest. Removing the price floor would make those who are legally unemployable, Legally employable. Eliminating the minimum wage will allow prices to be adjusted freely allowing the output of those whose marginal productivity fall below the minimum to be employed at their market value. That is not conjecture. "You're right, It's my argument, Lol. Actually this is relevant because I'm proving that the employment contracts created by the removal of minimum wage will be too weak to take. So it won't create anymore jobs. The current minimum is already at "the floor" as you call it. So it's quite relevant. " Assuming of course a person would seek one job, Right? That is not proof. You may characterize a contract below the minimum as "weak" but how would you characterize a labor contract which can't be established at all due to government policy? "This is relevant because it shows that employers have better alternatives to laying people off. They can get tax breaks by hiring disenfranchised groups. Which gives them a higher profit margin. " No, It doesn't show better alternatives. Think of it this way: a tax-cut reduces Government Revenue; A reduction in government revenue in relation to its obligations increases debt. The government finances its debts by printing paper or issuing Treasury Bills (or some other form of security. ) By doing this the government increases its debt by attempting to address its debt by selling more debt. This increase in debt will be addressed with the increase in taxes. It's not really a "tax break;" it's a "temporal offset. " Short-term profits may see an increase, Long term profits will not. "So you're saying minimum wage is self evident? I'm sorry, But I need a better rebuttal than that. You can't just say that minimum wage cause unemployment and that the proof is itself. " No, The fact the minimum wage's creating unemployment by outlawing the employment of those whose marginal productivity fall below the minimum is self evident. The minimum wage's creating unemployment is an axiom in Economics because of the Law of Supply and Demand, which suggests that demand curves are downward sloping to reflect the inverse relationship between the quantity demand of a resource and its price and supply curves are upward sloping to reflect the direct relationship between the quantity supply of a resource and its price. So when a minimum wage is imposed it creates a surplus. There are people available to work (supply) but not enough job opportunities (demand. ) "The data doesn't show anything to support your claim. So how is this self evident? " and. . . "They look at the trends in both to find correlations. The result found no correlations. That's honest data. It's not like they said "we found correlations for the other side" They said there was nothing there. " The data you cited is insufficient. Once again, It doesn't control for minimum wage. It simply analyzes the changes in the minimum wage and changes in unemployment rates, And puts them together side by side. It does not at all isolate any relation minimum wage has to unemployment. You establish a control for the analysis by attempting to establish relationships and ruling them out as factors. The data you cited does not do this at all. It would be like my stating that firearms have as such and such effect on the overall death rate, When I fail to consider the other factors which may contribute to the overall death rate (e. G. Diabetes, Heart attack, Car accidents, Etc. ) Or the "wage gap" which has political narratives that fail to control for sexism as a cause. Furthermore, Your data does not consider the various state minimums which don't align with Federal Minimum Wage (thus I continue to point out that your data refers to the Federal minimum. ) Lastly, The proposition once again isn't about the unemployment rate which can vary from job field, State, Or country. The proposition is once again, "The Minimum Wage Creates Unemployment. " Not only does minimum wage prohibit the legal employment of those whose marginal productivity fall below the minimum, But also it creates a surplus in the labor market. Hey now, There's not reason to be insulting, Let's keep this civil please. The unemployment rate is germane to the topic since it is the way that we get data on the matter. I'm allowed to make points that are relevant to the subject. Especially when they give us data to help understand better. " I did not insult you. I estimated your capacity in this debate. If you take it personally, That is no fault of mine. As for the unemployment rate being the only way in which to acquire data on the matter, That is also wrong. You are allowed to make points relevant to the subject. So then make one. If you wish to cite data, Then make sure it substantiates your point rather than provide aggregate data which neither informs your argument sufficiently nor pertains to the subject matter. [NOTE: I'm not citing empirical data for a specific reason despite the abundance of it on the topic. Unemployment rates are merely ratios of those out of work and the labor force, Which the Bureau of Labor Statistics narrowly defines as the number of the employed subtracted by the number of the Unemployed who have been looking for work for at least four weeks. It doesn't count those who don't meet that criterion. Furthermore, There's no consistent unemployment rate. It varies among localities. Finally, The Unemployment rate does not address the state of being unemployed; it only relates it to a given sample and producing a percentage. Remember I propose that "The Minimum Wage Creates Unemployment" not that it creates a particular unemployment rate. I propose this on the premise of extending legal policy of the minimum wage to its logical conclusion which is to prohibit the legal purchase of labor below the set minimum, Creating a surplus in the labor market. ] The BLS method: https://www. Bls. Gov/cps/cps_htgm. Htm#def