The last time Hackerfall tried to access this page, it returned the error Could not connect to server. A cached version of the page is below, or click here to continue anyway

Citizen Debate

Supporting the affirmative:

feeling_the_bern

I agree with the resolution. The federal minimum wage should be raised.

Let’s start with the problem. As it stands today, the federal minimum wage of $7.25 ($15K per year for a full time worker) is not enough to support a family. Anywhere in America. The actual number ranges between $10 and $14 per hour depending on location.

There's a humanitarian question here: should a person working full-time in one of the most affluent nations in the history of the world not be paid enough to pay the bills?

But not only is raising the federal minimum wage simply the right thing to do, it’d immediately boost the economy. In 2014, a group of 600 economists, including 7 Nobel Prize winners, wrote a letter to the president and Congress urging the federal government to raise the minimum wage (source: http://www.epi.org/minimum-wage-statement/). Their analysis: raising the minimum wage gives low wage employees more spending power, which leads to an immediate and sustainable increase in demand for goods and services and lifts the entire economy.

Minimum wage workers, unlike more affluent members of society, are unlikely to stash away their extra earnings. They earn so little that their extra wages would immediately be used to buy more things. Buying more things (demand) =  economic growth.

At the same time, the aforementioned group of economists argued, raising the minimum wage would have little, if any, impact on actual employment. In other words: it is the assessment of top economists that a higher minimum wage would not affect employment of minimum wage employees.

Businesses would also benefit. An increase in wages has been shown to lead to reduced turnover, which ultimately saves businesses on recruiting, staffing, and training (source: http://www.irle.berkeley.edu/research/livingwage/sfo_mar03.pdf).

In fact, when the state of Washington increased their minimum wage to $3 more than that of Idaho’s, many expected businesses on the Washington/Idaho border to move across to Idaho. The opposite happened: business was so good for the Washington businesses (the ones paying a higher wage) that the state’s major business lobby decided to stop fighting the minimum wage law. (Source: http://www.nytimes.com/2007/01/11/us/11minimum.html?hp&ex=1168578000&en=bf304392cdc5baf4&ei=5094&partner=homepage&_r=0)

Finally, there’s a question of why this should be a federal issue at all or if it should be left to the states. While state and local governments should be setting their own minimums indexed on cost of living, many rely on the federal government to set any law at all. Five states don't even have minimum wage laws. 

The federal government already takes a stand on what the minimum wage should be, which sets a baseline for state and local lawmakers. That stance should be more reasonable; $7.25 is a farce. There’s no question that local minimum wages indexed on cost of living should exist -- but the baseline should be set by the federal government to keep local governments honest, make minimum wage employees less dependent upon government assistance (including federal government assistance), and help even those who live in areas with the lowest cost of living afford to make ends meet on a full-time work schedule.

The federal minimum wage should be raised. It’s the right thing to do, it’s been shown to improve business, it boosts the economy, and it solves a social injustice.

Supporting the negative:

conscious_conservative

I disagree with the resolution. The federal minimum wage should not be raised.

First, it's important to note, that we're talking about the federal minimum wage - not the minimum wage at a local jurisdiction or state level. Second, to frame the question, we should state that today's federal minimum wage is $7.15/hour and that the median hourly wage in the USA in May 2015 was $17.40 (http://www.bls.gov/oes/current/oes_nat.htm). Now let's get right to it!

Is there a better way?

Mainly, the goal of a minimum wage increase is to benefit minimum wage workers by increasing their income. This money is not produced from thin air. It comes from the businesses which employ these people. America's first objection to a minimum wage increase should be that it selectively punishes businesses who employee minimum wage workers. Hedge funds, wall street, Google, Apple, ExxonMobil, and many of America's most profitable companies, simply will not foot the bill of a minimum wage increase because they don't employ minimum wage workers. If we want to improve the welfare of minimum wage workers, let the U.S. government write and send a check in the amount of the increase times the number of hours worked to every minimum wage worker. In this way, all of the United States can pay for this increase, instead of only the businesses who support minimum wage workers by employing them.

50 states. 50 Costs of Living. 1 minimum wage.

The cost of living in Hawaii is more than twice that of Mississippi (https://www.missourieconomy.org/indicators/cost_of_living/). If you index the federal minimum wage to Mississippi levels, it does nothing for people in Hawaii (or California for that matter. California's cost of living is 60% higher than Mississippi's). If you index it to Hawaii levels, say by doubling it, the new minimum wage in Mississippi will be higher than the current median hourly wage of $13.94 (http://www.bls.gov/oes/current/oes_ms.htm), which would surely cause economic havoc. Simply, I doubt that businesses would have the funds to pay their workers, many of whom, will be requiring double wages. Cost of living levels are not only highly variable at the state level, but at the city and town. The cost of living in New York, NY is 85% higher than the cost of living in Buffalo, NY (http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&country2=United+States&city1=Buffalo%2C+NY&city2=New+York%2C+NY&tracking=getDispatchComparison). The cost of living in San Francisco is 2.175x higher than that of Biloxi, MS. Quite simply, a national minimum wage makes no sense, unless it is indexed to the state with the lowest cost of living and wages. And then if it is, what is the point? It's simply irrelevant in states like California and New York.

 

Unforeseen consequences.

In response to an increase in minimum wage, business owners will likely seek out methods by which to keep their profits at a wage increase level. They can choose to replace their minimum workers with machines or computers, hire fewer better skilled employees instead of multiple minimum waged workers, or in some cases (particularly manufacturing) move their operations overseas. These scenarios are not fantasy - American businesses have employed all these strategies in the past to reduce their labor costs. And in all of these cases, the law designed to benefit minimum wage workers will reduce their overall employment and thus their welfare. In some cases, none of the mentioned options will work and these businesses which are highly dependent on minimum wage workers will simply close down. And we should note that 50% of minimum wage workers are employed by businesses of 100 or fewer people, while 40% are employed by businesses of 50 or fewer people (http://www.wsj.com/articles/SB10001424052702304655104579163880944640994). Again, this will ultimately hurt the workers the minimum wage law was meant to protect. Finally, some businesses may achieve their old profits by raising prices, which of course will have a negative effect on all consumers. Minimum wage workers may be disproportionately affected, given that they spend larger amount of their income on consumption.

The bottom line is that increasing the minimum wage is about helping minimum wage workers and benefiting society at large, but we can see from the above analysis, increasing the federal minimum wage either hurts minimum wage workers because of the actions business owners will take in response or is irrelevant because of variability in wages and costs of living in the USA. If American voters agree that minimum wage workers need more support, then why not come up with a better program to support them than a system that is both antiquated and only paid for by the very businesses which support these workers.

An increase in the federal minimum wage is wrongheaded. We can do much better to help minimum wage workers and the foundation of America's economy.

Continue reading on www.citizendebate.org