Archived from Palomar College Communications Department 2019 Submissions
By: H. Elizabeth Williams
Minimum Wage Debate: Affirmative
America as a whole is an outlier among advanced economies... one would expect America, where GDP per person is $53,000, to pay a minimum wage around $12 an hour. That would mean a raise of about 65% for Americans earning the minimum pay rate.
The federal minimum wage was introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt. It was initially set at $0.25 per hour and has been increased by Congress 22 times, most recently in 2009 when it went from $6.55 to $7.25 an hour. 29 states plus the District of Columbia (DC) have a minimum wage higher than the federal minimum wage. 1.8 million workers (or 2.3% of the hourly paid working population) earn the federal minimum wage or below. The truth is that the federal minimum wage of about $7.25 per hour (2019) is too low for anyone to live on. If it was higher, let’s say about $15 per hour, which most are fighting for now, it will help create jobs and grow the economy.
If we were to raise the minimum wage to $10.10 per hour it would increase economic activity and increase job growth. According to The Economic Policy Institute, “a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period.” And as for job growth For example, if you take New Jersey, who raised its minimum wage by 80 cents, and take Pennsylvania who did not, you find no indication that the rise in the minimum wage reduced employment. And we all know the if employment increases so does the productivity. Don’t believe me? Well, According to a study by the Center for Economic and Policy Research (CEPR), the federal minimum wage would have been $21.72 per hour in 2012, instead of $7.25, if the minimum wage had kept pace with increases in productivity since 1968. When referring to Salvaotre Babones, “The Minimum Wage Is Stuck at $7.25; It Should Be $21.16 -or Higher,”July 24, 2012, "If our standard for minimum wages had kept pace with overall income growth in the American economy, it would now be $21.16 per hour."As the minimum wage rises and work becomes more attractive, labor turnover rates and absenteeism tend to decline.A 2014 University of California at Berkeley study found "striking evidence that... turnover rates for teens and restaurant workers fall substantially following a minimum wage increase," declining by about 2% for a 10% increase in the minimum wage. A 2014 survey found that 53% of small business owners believed that "with a higher minimum wage, businesses would benefit from lower employee turnover and increased productivity and customer satisfaction."
Not only will increasing minimum wage increase economic activity and productivity, but it will also reduce poverty. A person working full time at the federal minimum wage of $7.25 per hour earns $15,080 in a year, which is 20% higher than the 2015 federal poverty level of $12,331 for a one-person household under 65 years of age but 8% below the 2015 federal poverty level of $16,337 for a single-parent family with a child under 18 years of age. According to a 2014 Congressional Budget Office report, increasing the minimum wage to $9 would lift 300,000 people out of poverty, and an increase to $10.10 would lift 900,000 people out of poverty. Can you imagine what $15 an hour would do? If that doesn’t sell you then you should also know that a higher minimum wage would reduce government welfare spending. The Center for American Progress reported in 2014 that raising the federal minimum wage by 6% to $10.10 would reduce spending on the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) by 6% or $4.6 billion. More than 1.7 million Americans would no longer be dependent on government assistance programs. They report the increase would shave $7.6 billion off annual government spending on income-support programs. That would do amazing things in our country and we could have more money to spend on other things that we need in the country.
Alan Manning, “Why Increasing the Minimum Wage Does Not Necessarily Reduce Employment,” Social Europe, Jan. 27, 2014
American Sustainable Business Council and Business for a Fair Minimum Wage, “Small Business Owners Favor Raising Federal Minimum Wage,” asbcouncil.org, July 2014
Arindrajit Dube, T. William Lester, and Michael Reich, “Minimum Wage Shocks, Employment Flows and Labor Market Frictions,” irle.berkeley.edu, Oct. 2014
Congressional Budget Office, “The Effects of Minimum-Wage Increase on Employment and Family Income,” cbo.gov, Feb. 2014
David Cooper, “Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost,” Economic Policy Institute website, Dec. 19, 2013
David Cooper, “Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share,” Economic Policy Institute website, Oct. 16, 2014
John Schmitt, “The Minimum Wage Is Too Damn Low,” Center for Economic and Policy Research website, Mar. 2012
Rachel West and Michael Reich, “The Effects of Minimum Wages on SNAP Enrollments and Expenditures,” Center for American Progress website, Mar. 2014
Salvaotre Babones, “The Minimum Wage Is Stuck at $7.25; It Should Be $21.16 – or Higher,” Inequality.org, July 24, 2012
US Department of Labor, “History of Federal Minimum Wage Rates under the Fair Labor Standards Act, 1938-2009,” dol.gov (accessed Feb. 4, 2016)
Minimum Wage Debate: Opposition
The federal minimum wage was introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt. It was initially set at $0.25 per hour and has been increased by Congress 22 times, most recently in 2009 when it went from $6.55 to $7.25 an hour. 29 states plus the District of Columbia (DC) have a minimum wage higher than the federal minimum wage. 1.8 million workers (or 2.3% of the hourly paid working population) earn the federal minimum wage or below. The truth is that the federal minimum wage of about $7.25 per hour (2019) is too low for anyone to live on. If it was higher, let’s say about $15 per hour, which most are fighting for now, it will help create jobs and grow the economy.
Many businesses can’t affors to pay their workers more and will be forced to close, lay off workers or reduce hiring. That increases have been shown to make it more difficult for low-skilled workers with little or no work experience to find jobs or become upwardly moble; and that raising the minimum wage at the federal level doesn’t take into account regional cost-of living variations where raising the minimum wage could hurt low income communities in particular.
My opponent states that 85,000 jobs would be created over a three-year period if we raise the minimum wage from $7.25 an hour to $10.10 an hour, but according to The Congressional Budget Office projected that a minimum wage increase from $7.25 to $10.10 would result in a loss of 500,000 jobs. 38% of employers who currently pay minimum wage said they would lay off some employees if the minimum wage was raised to $10.10. 54% said they would decrease hiring levels. My opponent compares New Jersey to Pennsylvania, but there are about 48 other states you’re forgetting about. It’s a case by case scenario. For instance, ] San Francisco's Office of Economic Analysis said that an increase to $15 would reduce the city's employment by about "15,270 private sector jobs."
Raising the minimum wage would not decrease poverty, but increase it majorly. Their hours and employment decline when the minimum wage is increased, and the combined effect of these changes is a decline in earned income. As explained by George Reisman, PhD, Professor Emeritus of Economics at Pepperdine University, "The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller the quantities of goods and services demanded and the number of workers employed in producing them."
My opponent claims that raising the minimum wage would increase job growth and causing companies to boom, but it’s actually quite the opposite. Actually, a minimum wage increase would hurt businesses and force companies to close. Jamie Richardson, MBA, Vice President of fast food chain White Castle, said that the company would be forced to close almost half its stores and let go thousands of workers if the federal minimum wage were raised to $15. Forbes reported that an increase in the minimum wage has led to the closure of several Wal-Mart stores and the cancellation of promised stores yet to open.
Overall, it would have a decrease in economic growth and cause the poverty to increase more than usual, which I don;t think anyone wants for their community.
Congressional Budget Office, “The Effects of Minimum-Wage Increase on Employment and Family Income,” cbo.gov, Feb. 2014
David Neumark, Mark Schweitzer, and William Wascher, “The Effects of Minimum Wages throughout the Wage Distribution,” citeseerx.ist.psu.edu, Dec. 1999
George Reisman, “How Minimum Wage Laws Increase Poverty,” Mises Institute website, Apr. 4, 2014
Office of the Controller, City and County of San Francisco, “Increasing the Minimum Wage: Economic Impact Report,” sfcontroller.org, July 17, 2014
Sean Williams “Bernie Sanders’ Plan to Raise the Minimum Wage Has Plenty of Flaws,” Business Insider, Aug. 23, 2015
Tim Worstall, “Walmart’s Oakland Store Closure: Oakland’s Minimum Wage Is Blamed,” Forbes, Jan. 18, 2016
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