The U.S should abolish the Minimum Wage

Thanks to 16kadams for a great debate. I learned quite abit.Also, sorry for taking alot of time this round, I've been quite busy, with school and other work. Anyways, here is my defensInflationThe study linked by my opponent concludes that a 10% increase in MW may cause inflation of no more than 4% on food prices and overall inflation of 0.4%. This is largely outweighed by the disposable income benefits of the MW, could be attributed to the higher demand generated from increased consumption that occurs due to the existence of the MW.Market fairnessThe argument here was misunderstood by my opponent. I did make note of the existence of the “natural” buffer to changes in wages, known as competition, which I referred to as “the competitive nature of the free market”. My argument was not so much that the supply & demand chain is bad, but again more of a preemptive argument against the naturalistic fallacy that is assuming the natural supply & demand cycle is inherently the ‘best’ system, especially for the labour market, simply because it occurs naturally. As he proceeds this argument, he brings up Switzerland and their “high” minimal wage levels, implying that the lack of an MW enforced at the federal level has directly led to high wages. But Switzerland is also very famous for its extremely high cost of living. [1] Besides, Switzerland and America are very different countries in very different ways. America has many more and much larger financial responsibilities around the world than Switzerland does, paired with a much larger economy and a much greater population, comparing the two countries would be like comparing apples to oranges.Access to basic goodsThe EITC and UBI do sound like reasonable ways to alleviate the poverty issue. However, those are more directed to helping the unemployed rather than helping the employed. The MW and the EITC (and UBI) could all exist at the same time, so to say that one replaces the other isn’t exactly accurate. The EITC, for example, could incentivize the unemployed to find work by applying a tax credit on low income work, but the MW is designed to protect the wages that those people earn while they are working.My opponent argues that rises in MW levels reduce GDP, making this another trade-off. However, assuming for a minute this is true, since my opponent hasn’t made clear exactly what areas in the market are experiencing lower production, then we would need to deduce that the drop in GDP is caused by the lack in capital investment as my opponent explains in his next paragraph. If capital investment is in fact decreased from the MW, it would result in jobs being more labour-intensive, which is desirable in the effort to solve the income inequality issue, as returns made from capital investment only get re-invested into more capital, shrinking the number of unskilled labour jobs in the market. The point is to balance out the effects of technological development, which would increase the labour’s share of GDP. In fact, the argument of ‘less capital investment’ contradicts the ‘substitution effect’ that my opponent argued on the neoclassical economic model in R2. Since my opponent has already conceded that capital investment is moderately reduced by the MW, then he cannot argue for the substitution effect mentioned in R2.Efficiency WagesThe theory of efficiency wages is clear: paying a worker at a higher rate than the one set by the supply demand chain has a positive effect on productivity. My opponent is attempting to minimize its application, just because the theory was formed for a specific reason. Here, he is saying that because the efficiency wage theory was designed to explain why some businesses pay higher than others, the theory is not applicable here. If theories could be dismissed like that, then we could also dismiss many accidental discoveries and the theories derived from those discoveries based on the notion that theories are only valid in the contexts they were discovered in.This is not a matter of competition, as my opponent is saying, where companies like costco achieve more productivity because they give more wages than everyone else, and if the other companies gave higher wages then the effect of efficiency wages would be lost. My opponent is clearly misapplying the concept of competition in this scenario. Wages may be somewhat competitive in the market, but for the worker it is not a matter of competition. If staff A at costco makes more than staff B at walmart, but suddenly walmart increases wages given to staff B, and staff A and B make the same, how would that make reduce the effects of efficiency wages to staff A or B? I doubt the workers from either staff group care what the workers from other groups are making, as long as they are satisfied, or at least okay with their own wages.My opponent is trying to isolate my argument in an attempt to negate the resolution based on the one argument alone. I’m not saying that the MW should exist because just because it would benefit companies. I’m saying that, paired with the benefits of the MW (as mentioned in my other arguments), there are also minimal impacts, if not, positive impacts on businesses from the existence of the MW. InequalityAs I mentioned in R2, I acknowledge that income inequality is not inherently bad. I didn’t say that everyone is worse off because of moderate levels of income inequality, as capitalism increases the overall availability of wealth to both the rich and the poor. However, I also said that inequality can eventually become a problem.The problem with the r > g theory is not that people die. A “generation or two” is enough time for inequality to rise to very unhealthy levels. It’s happening now, as Piketty states, that capital returns are mostly re-invested into more capital, maybe expanding the national income, but at increasing amounts circulating back to the rich and not invested into labour. If this continues, the labour’s share of GDP will eventually shrink, as it is happening now. [2]Economic classes are relative, since the it is a comparison of one person’s level of income to everyone else’s. The wealthy may have seen a small decline in wealth between 1996 and 2005, but the share of wealth by the wealthiest classes have seen an overall (general) upwards trend to this day [3].ConclusionI have demonstrated that a minimum wage is necessary to not only protect worker wages from the decline caused by market forces, but also to aid in the process of solving the extreme inequality issues that America is facing today. Overall, this debate focused greatly on the unemployment issue, as well as the economic effects of the MW. My opponent's arguments about unemployment consists of innaccurate analogies as well as the unwarranted dismissal of the Card-Kreuger study. I have addressed these issues in R3, and have shown that the U.S should not abolish the minimum wage.Sources[1] http://tinyurl.com... [2] http://tinyurl.com... [3] http://tinyurl.com...