Resolved: The Minimum Wage Should be Increased

But I will still write a rebuttal to round 1 claims, simply because I want to. I will do it in a more… summarized version than I usually would. ==Rebuttals== R1) Welfare and minimum wages This was an interesting argument which I was not expecting. To argue that welfare pays more than minimum wages really is not an argument against the minimum wage. If anything, it is an argument in order to reduce welfare spending. Both welfare and minimum wages have been shown to be ineffective ways to reduce poverty. Further, the CATO report on the issue is flawed. The CATO report tends to exaggerate the amount of money those in poverty were receiving from the government. The report assumes that many of these families receive TANF, SNAP, LIHEAP, WIC, and TEFAP. However, there is convincing evidence that generally most people do not receive more than one form of assistance very often. Therefore, it is misleading to claim welfare pays more than minimum wage jobs, as the assumptions they plug into their results are flawed in and of themselves. Government transfers are actually much lower than the CATO report claims, and labor income for the lowest quintile far exceeds that of those who only receive government benefits [1]. R2) Minimum wages and poverty Wylted draws his evidence from a few sources: First, a Dube study, and the next from the Washington Post. And the post summarizes multiple studies. First, the Dube study. The Dube study reaches its conclusions by assuming no-impact on employment. And how does he reach the no-impact conclusion? He uses the same methodology from his previous study, Allgretto, Dube, Reich in 2008. They claim that when they control for spatial heterogeneity, there is no adverse effect from increased minimum wage laws. Using those results, he claims to find a slight increase in poverty due to minimum wage increases. These methods have been criticized by other scholars, as it often prevents the researchers from looking into potentially valuable data which is thrown out with the type of controls used in that method. Controlling for polynomials I state trends rather than controlling for linear time trends leads to the opposite conclusion. Therefore, the method which Dube uses (which finds no effect on employment) is not valid [2]. Therefore, as the entire assumption which Dube uses to prove a positive effect on poverty is flawed, his conclusion cannot be trusted. The Washington post article argues that economists agree that minimum wages lead to a decrease in poverty. This could not be further from the truth. They cite a paper by Neumark and Wascher and claim they conclude minimum wages will reduce poverty. Well, this tells me that the reporter must have not read the paper. Neumark and Wascher claim to find that minimum wages enhance the effects of the EITC for single mothers, meaning they will be helped. However, they also find that EITC has no effect on low skilled workers and minority men, and that minimum wages adversely affect both groups. Therefore, minimum wages would harm low skilled workers, teenagers, and minorities, while helping single mothers. The study does NOT say that minimum wages reduce poverty. They find it decreases poverty in one group, and increases it in another, and then argue whether or not minimum wages help the poor depends on who you are trying to help. And the study ignores the vast majority of research which claims minimum wages have no effect on poverty, and may increase it. Sabia and Burkhauser 2007: using census data from 1979 to 2003, they estimate the effect of minimum wage increases on poverty rates. They found no evidence that minimum wages reduce either overall poverty rates or poverty rates amongst workers [3]. Sabia and Burkhauser 2010: Using same methodology and using more recent census data, they continued to find no evidence that minimum wages reduce poverty [4]. Sabia 2008: looking at groups targeted by policy makers, single mothers, he finds no evidence that minimum wages reduce poverty for those groups [5]. Neumark and Wascher 2002: looking as to how people entered and exited poverty using CPS data, they found that workers who kept their jobs were often lifted out of poverty. However, many workers who lost their jobs were barred from income and their hardships increased. Only for Junior High school drop outs are there poverty-alleviating affects. Overall, there was a slight increase in poverty [6]. Neumark, Wascher, and Schweitzer 1999: Minimum wage increases have no poverty alleviating effects [7]. Neumark and Adams 2000: Living wages do not reduce poverty [8]. Neumark and Wascher 2008: Meta-analysis. No evidence that minimum wages decrease poverty. Evidence minimum wage increases may increase poverty. Evidence shows that wages, on balance, decline as minimum wages are increased [9]. Neumark and Wascher 1997: Minimum wages lead to statistically insignificant increases in poverty [10]. Sabia and Nielson 2013: Higher minimum wages do not help people make ends meet, pay rent, pay utility bills, or avoid financial insecurity [11]. Addison and Blackburn 1999: Only junior high drop outs have poverty alleviating effects. Overall, no effect on poverty from minimum wage increases [12]. So the Washington Post was half right. Economists have reached a consensus! Except… It is that minimum wages do not decrease poverty, and that minimum wages harm society. Vote CON :D . http://www.epi.org... . http://www.nber.org... Burkhauser, Richard V and Joseph J. Sabia. “The effectiveness of Minimum Wage increases in reducing poverty: Past, Present, and Future,” Contemporary Economic Policy 25 (2007): 262 – 281. Sabia, Joseph and Richard V Burkhauser. “Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor? ” Southern Economic Journal (2010): 592-623. Sabia Joseph J. “Minimum Wages and the Economic Well-Being of Single Mothers,” Journal of Policy Analysis and Management (2008): 848-866. Neumark, David and William I. Wascher. “Do Minimum Wages Fight Poverty? ” Economic Inquiry (2002): 315-333. Neumark, David, William I. Wascher, and Mark Schweitzer. “Will Increasing the Minimum Wage Help the Poor? ” Federal Reserve Bank of Cleveland Economic Commentary (1999). . http://www.nber.org... Neumark, David and William I. Wascher. Minimum Wages, 2008. . http://www.nber.org... Sabia, Joseph and Robert Nielson. “Minimum Wages, Poverty, and Material Hardship: New Evidence from the SIPP,” Review of Economics of the Household (2013). 12. Addison, John T. and MicKinley L. Blackburn. “Minimum Wages and Poverty,” Industrial Labor Relations Review 52 (1999): 393-409.