The Government Should Eliminate the Minimum Wage

I am going to rearrange the order of his arguments somewhat, as I'd like to address a few things that he covers before I go into refuting the substance of his argument. Burden of ProofAs I mentioned in the first round, I've given the voters a bit more liberty than I usually do in deciding who has the greater BoP and how that BoP needs to be fulfilled by both voters. My opponent respects that. However, I would like to cover the fact that my opponent thinks that if he proves that the minimum wage has no effect is proved, then he wins. If, at the end of the debate, the minimum wage is shown to have not effect on the economy whatsoever, a number of points can be concluded. One, the minimum wage is useless, and therefore doesn't even need to be a policy in the first place. Two, having complicated laws for something that has no effects is just inefficient, as the bigger the government, the greater the chance for corruption. Finally, as I explained in the first round, the minimum wage is at best a zero-sum policy, specifically in theory. The real world tends to reveal more flaws in a policy than benefits, and thus, in the real world, a theoretical zero-sum policy generally becomes a net-loss policy. If I can prove this at the end of the debate, this whole BoP issue isn't even a problem. SourcesWhile I do agree with my opponent that think tanks certainly do need to be regarded with skepticism, my opponent makes two breaches of logic here. One, he's arguing that all articles from think tanks are biased, and thus should not be acknowledged, and this is most certainly not true. While I will be the first to admit that some are, not all of them are. I try to cite more reliable ones. Think tanks can have very reliable articles. And two, he tries to decide what the voters should – vote quality. This decision should be left to the voters. I also find it ironic that my opponent brings this objection up, considering that almost half of his sources come from Wikipedia, a unreliable source that shows clear leftist tendencies in its articles and prevents people from changing information on those opinionated topics. Finally, as for my opponent's long "meta-analysis" of a couple of studies that cite employment issues with the minimum wage, he spends a lot of time trying to refute a study that I didn't even cite (at least directly). He, by no means, shows that all studies that report some negative implications of the minimum wage are invalid. Economic TheoriesThis is sort of my “transition” argument to refutations of actual arguments for the resolution. Here, my opponent doesn't try to specifically refute my arguments, but tries to destroy them with one single blow to their ideology. Now, this debate argument is way too short for me to argue the merits of Austrian Economics, but I feel I do need to make a short reply. Defending the notion of a logical, or unstatistical policy, "Complex adaptive systems like the modern marketplace do not behave mechanistically. They cannot be controlled precisely with the rods and levers of monetary and fiscal policy. To believe so is an enormous – and as we’re finding out – costly error. It’s also massively arrogant and conceited. " In other words, economics is not a science. The article says earlier that, "Complex adaptive systems like the modern marketplace do not behave mechanistically. " In other words, statistics certainly do not mean everything in an economic debate. [1]Taking this from a different perspective, my argument was not solely Austrian. It did have a lot of statistics in it, which is more reflective of the Chicago School. What is the difference? "They stress quantitative empirical work to test their theories. They also published more of their findings in the professional journals and with well-known university presses. They see themselves as inside the profession. " In other words, statistics and facts are more applicable according to the Austrian school. [2]I tried to incorporate a more holistic approach into my arguments by covering both logic and evidence, thus including both Austrian and Chicago thought into my arguments. My arguments should most certainly not be rejected solely because they fall under one of the two schools I mentioned. Not only does he present only one side of economics (the factual side), but he also doesn't argue why Austrians are bad. Yes, they are not the mainstream view. All I leave him is this – why were Austrians able to predict the Recession? Consumption in the EconomyMy opponent commits the broken window fallacy here. Economics, because of its nature to work with institutions that yield significant amounts of power, is a discipline that has a number of fallacies. One of them is the broken window fallacy, or the tendency for economic policies to be judged only on their short-term and immediately foreseeable consequences. As Henry Hazlitt puts it, however, "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. "[3]This shows why my opponent's argument makes no sense. An economy, at a certain amount of time, contains a fixed amount of capital. If, say, I give $100 to a homeless person, that increases his consumption by as much as it decreases my consumption. In other words, just as much money is going into the economy as is being taken away from it. This is the minimum wage in a nutshell. "What they neglect to calculate is the lower spending by those who are laid off or can’t get jobs because of the higher minimum wage, and the lower spending on things other than wages by businesses affected by it. It’s a classic example of Frederic Bastiat's broken window fallacy. "[4]Again, the minimum wage is, at best, a zero-sum game. It can never create what isn't there, and must take from other potential. In other words, the benefit of one comes at the equivalent cost of another. The Gini Coefficient and Income InequalityWhat my opponent hasn't proved is that reducing current levels of income inequality is desirable. It is very well argued that, "The rich earn higher incomes because they contribute more to society than others do. However, because of diminishing marginal utility, they don’t get much value from their last few dollars of consumption. " There comes a certain point where the “rich getting richer” doesn't really mean much. [5]Regardless, however, the minimum wage would not effect poverty conditions. A recent CBO report stated that raising the minimum wage from $7.25 to $10.10 would: "Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold. " This may seem like a lot, but that wouldn't even raise the national poverty rate by one percent. [6]The reason for this is that most minimum wage workers are not in poverty. "Unfortunately, as labor economist Mark Wilson put it, 'evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels. ' One reason is that most minimum wage workers are secondary workers in non-poor households, while very few are heads of households. " In other words, only about 1 million of the supposed 16.5 million people helped by the minimum wage are actually lifted out of poverty. The vast majority are already in comfortable conditions. [7]What this causes is a net loss: "If so, the proposal is to spend $100 billion to remove 900,000 people from poverty. That is about $110,000 per person lifted out of poverty. Considering that the poverty line for a family of four is $24,100 and that people who are working must (by definition) already be earning something, any policy that costs more than $6,000 per person lifted out of poverty is quite expensive. "[8]The minimum wage has very little effect on poverty conditions, and mostly raises the salaries of people who aren't in poverty. It may reduce overall income inequality, but not where it needs it. Further, over $100,000 is spent per person, which takes away a much greater amount from the economy than it brings in. Unemployment FiguresI'm sure my opponent will have much more to say about this in his next argument, so I'm going to leave this until the last round. All I will say is this: "But unlike the model with workers’ search effort, unemployment always decreases with the wage. Although participation is weaker when wages are low, firms still create jobs because their profits are high. This swells the number of vacancies relative to the number of job seekers, making it more likely that they will find work. "[9]ConclusionAgain, the minimum wage is a zero-sum game. The input it creates is only as much as the input it takes away. The money that it uses to take some people out of poverty is only as much as it takes away from the economy. It should not be kept. Sources[1]: . http://dailyreckoning.com...[2]: . http://www.fee.org...[3]: Hazlitt, Henry. Economics in One Lesson. [4]: . http://www.forbes.com...[5]: . http://www.nytimes.com...[6]: . http://www.cbo.gov...[7]: . http://bastiat.mises.org...[8]: . http://www.forbes.com...[9]: . http://www.clevelandfed.org...