A $15 minimum wage would boost the economy

Pro

Thanks for accepting my debate, ConservativeDebating! I'm looking forward to it! :)

Point 1:

Millions of lower income people will make more money. Therefore, Millions of people will be spending more money. This boosts the economy.

A study by the Congressional Budget Office says that, "Raising the federal minimum wage to $15 an hour by 2025 would increase the pay of at least 17 million people…" [1]

It also says that it would possibly increase pay for "…another 10 million Americans who would otherwise be earning slightly more than $15 per hour. "

Meaning that an estimated 27 million Americans will be making more money.

Point 2:

In 2016, The US had a 17. 8% poverty rate [2]. This is a significantly high poverty rate (AKA: an attribute of a weak economy). Paying a $15 minimum wage will pull more people out of poverty.

Point 3:

Job losses can easily be prevented or reduced by proper implementation of a $15 wage. As my first source states, Small increases would not result in major job losses. "An increase to $10 an hour would give a raise to 1. 5 million workers and would have "little effect on employment. "" [1]

Small businesses could readily be allowed a more gradual implementation of a $15 minimum wage, While big businesses could be expected to implement them sooner. Multi-million and billion dollar companies would be the most capable of paying a $15 minimum wage.

What's more… a significant number of jobs paying under $15 an hour are hosted by multi-million and billion dollar companies. Walmart for instance employs 1. 5 million employees [3]. Sure, While this includes various employees who make more than $15 an hour, Those employees are outliers. The average Walmart employee makes $11. 75 an hour [4].

KFC, Taco Bell, Pizza Hut, McDonald's, And Target alone employ close to 1. 7 million people [5]. Not to mention anyone making below $15 an hour at a Burger King, Wendy's, Arby's, Walgreens, Wegmans, Subway, DQ, Dominos, Etc. The list goes on. These are all extremely profitable businesses that can afford to pay employees well without increasing prices on services or products, Or cutting jobs.

Point 4:

Studies indeed show that increased wages improve the economy. It raises pay for low wage workers while increasing jobs.

"The bulk of recent economic research on the minimum wage, As well as the best scholarship, Establishes that prior increases have had little to no negative consequences and instead have meaningfully raised the pay of the low-wage workforce. " [6]

"New data released by the Department of Labor shows that raising the minimum wage in some states does not appear to have had a negative impact on job growth…" My source quotes the AP: "In the 13 states that boosted their minimums at the beginning of the year, The number of jobs grew an average of 0. 85 percent from January through June. The average for the other 37 states was 0. 61 percent. " [7]

Point 5:

While decent minimum wages are not the end-all-be-all of strong economies, Higher minimum wages are correlated with lower poverty rates.

Australia, Luxembourg, France, Netherlands, And Germany are the top five countries with the highest minimum wages in the world [8]. Their poverty rates are all significantly lower than the US' poverty rate. Their poverty rates range between 8. 3% to 12. 1% [2]. Compare that to the US' 17. 8% poverty rate.

The US ranks 9th among highest minimum wages across the world.

Let's compare who ranks above the US. That's Japan in 8th place. Japan has a 15. 7% poverty rate.

Let's compare who ranks below the US. That's Poland in 10th place. Poland has a 10. 3% poverty rate. Turkey ranks further behind in 11th place and has a 17. 2% poverty rate. Spain comes in 12th with a 15. 5% poverty rate.

I'll admit there isn't a perfect correlation between minimum wage and poverty, But there is a correlation suggesting the lower the minimum wage -- the higher the poverty rate. And while correlation does not equal causation, There is one thing I can prove:

Paying people more money makes them less poor. This statement is undeniably true.

[Sources in the comments]

Con

I’m excited for the debate too, Thanks for allowing me to accept!

Point 1: “People will make and spend more money.

Pro cites recent report from the CBO, But the funny thing is that this is a very Con-tilted report. I’d encourage anyone to read or look at how American political parties are using it—Republicans love it and Democrats ignore it. The headlines were not “more people are making more money! ”, But were instead “more people are going to lose jobs! ” or “how many people would really lose jobs from a $15 minimum wage? ” etc.

“CBO finds a $15 minimum wage would pull 1. 3 million workers out of poverty at the cost of 1. 3 million jobs in the median scenario, And 3. 7 million jobs in the worst-case scenario. Put differently, As many as three people would lose their jobs for each person no longer in poverty. ” [1]

Furthermore, It concluded that the act would “reduce real family income by $9 billion once phased in, As reductions in employment (among other impacts) offset the increase in some workers’ pay. ” [1]

Even further, There is no going back, Once the damage is done, It’s done for those workers: “displaced workers could face long-term harm ‘if minimum-wage increase keeps them from developing skills’. ” [1]

Indeed, Some individuals will increase pay slightly, Pro’s “27 million” is considering every employee that might see their wage increase, The report specifically concludes that only 1. 3 million is a significant increase to affect people’s lives and raise them from poverty. However, While acknowledging this, It also shows the negatives of the cost of three more people.

In this case, It should be clear the negatives outweigh the positives.

Point 2: “People will rise out of poverty. ”

Pro’s point is a two sentence assertion, The source just cites the poverty rate, Nothing about minimum wage.

Pro's last source did conclude 1. 3 million workers would be raised out of poverty, However, Unfortunately for the pro, This comes at the cost of three other worker jobs. This is above, So I won’t repeat it here.

Point 3: “Gradual implementation solves all the problems. ”

CBO is already analyzing gradual implementation of all the different magnitude options. It concludes there is a less, But still real, Impact for less wage increases. This is not the same as saying if we do it gradually, Then you capture this as a benefit.

You can’t just get out of the argument by trying to say $15 is actually like implementing $10, Then $12, Then $15, Because its not. The report explicitly considers $15 as a gradual implementation and the job loss is resulting from once it is phased in over a gradual time period.

Obviously, No one thinks implementing $15 minimum wage tomorrow would be a good idea lol.

Point 3. 5: “Big businesses can afford it, Small businesses won’t be affected. ”

Small businesses cannot afford to pay more, Which is why they are the ones predominantly paying minimum wage employees, Which means the policy of a $15 minimum wage predominantly affects small business, Not big multi-million- or billion-dollar corporations.

Pro asserts “What's more… a significant number of jobs paying under $15 an hour are hosted by multi-million and billion dollar companies. ” Let’s show how this is factually incorrect.

Every year, The Census Bureau surveys employees based on income and the size of their company. The Employment Policies Institute did an analysis of this data and determined the following:

“ the vast majority of people earning the minimum wage aren’t working at large corporations with 1, 000 or more employees. Roughly half the minimum-wage workforce is employed at businesses with fewer than 100 employees, And 40% are at very small businesses with fewer than 50 employees. ” [2]

“ ‘low-wage’ employees earning $10 an hour or less: 46% still work at businesses with 100 or fewer employees. ” [2]

These facts address that the case that big corporations are responsible and need to pay up is simply not the vast majority of what we are talking about, And in fact these minimum or low wage workers are earning low wages because they’re working for a small business.

While some of these companies are independently owned businesses, Many are franchisees affiliated with a large corporation’s brand, Think McDonald’s (80% franchises). In any case, The profits and costs are specific to that small business not the affiliated multinational corporation and executives. Pro lists plenty of these situations, Without understanding how the actual business operations work: “KFC, Taco Bell, Pizza Hut, McDonald's, And Target”, Etc. My same source continues:

“In either case, The profits and executive pay at the country’s largest businesses have nothing to do with the stark economics these small-business owners face: single-digit profit margins, Extremely price-sensitive customers, And no room to absorb a substantial increase in the minimum wage without dramatically reducing the cost of service. ” [2]

In addition, These businesses are not “extremely profitable” as pro suggests. Source continues: “According to Deloitte’s Restaurant Industry Operations Report, The median profit margin at an independently owned fast-food restaurant is 2. 6% - and only about a percentage point more at a corporately-owned location. ” [2]

With these harsh realities facing small businesses, It seems to become clearer that the policy would only have a potential negative effect on the workers it attempts to help.

Point 4: “Higher minimum wage leads to more jobs. ”

Let’s use simple economics reasoning to understand why this statement doesn’t make sense. Some business just had its labor costs doubled by the artificially set minimum wage increase. Naturally, The executive shave a meeting, What can we do? Well, The solution is to cut costs or raise prices, Those are the only options to maintain profit. As discussed above, If the company could raise prices without losing customers, It would already have done that, Which means that it must cut costs, Causing them to either cut employees or limit their number of working hours.

You source is mostly studying the effect of modest wage increase, Not a $15 minimum wage spike, Which is akin to a national 107% increase. In additional there are many studies that show these wage increases are going to far, For example in California and Seattle. [3] [4] [5]

Point 5: “Other countries have higher minimum wage and they also have lower poverty. ”

Okay so first of all, No country has a $15 minimum wage. None. Your own source says the highest national minimum is equivalent to $10. 78. So pro’s $15 policy is globally unprecedented by their own source.

If none of these countries have a $15 minimum wage and you are arguing that their minimum wage shows they have low poverty, Then surely we wouldn’t need anything above that to solve the same amount of poverty as the rest of the world?

It doesn’t really matter, Because you are correct. Correlation is not causation, And you never make an argument why this correlation should be considered. You simply say: “I’m not saying, But I’m saying, Take a lot at these two stats. ”

I’ll make an argument why it is irrelevant. First of all, There are so many different policies and cultures that affect poverty that trying to internationally isolate one policy as a silver bullet that works elsewhere so it would work here is ludicrous, Think healthcare, Welfare, Or other government programs that had big differences.

Perhaps more importantly, The US is the innovator of the world. With the American dream, We encourage small businesses to startup with new products or services and spread them throughout the world. We do this, Allowing other countries to piggyback on our innovation/entrepreneurship. America can’t be compared because implementing a $15 minimum wage only ramps up the costs for creating a new business and disincentivizes this entrepenuership.

Other Side Effects of $15 Minimum Wage:

Let’s talk about the very real side effects that the raise would cause around the economy, And even the environment.

As California has been raising its minimum wage to a $15 target, Many companies have faced the harsh realities of the utopian policy.

“[RePlanet, California’s largest recycling chain] announced the closure of its remaining 284 centers, Marking more than 1, 000 lost jobs. A spokesman stated that, . . . ‘the rise in operating costs resulting from minimum wage increases and required health and workers’ compensation insurance’ made operation unsustainable. ” [5]

“CBS reported that over 40% of California’s recycling centers closed in the past five years. [5]

Certainly, This effect might not even cross your mind at first, But it is nonetheless very real. Higher minimum wages effect not only small companies, But also companies that just have low profit margins in the first place, From green recycling companies to the vast majority of restaurants.

It has also forced closures or cuts in iconic business, That mostly have some value not derived from the service.

Even further, Working parents are indirectly hurt. Families dependent on subsidized childcare lose state assistance with the increase in wages that they will get in their paychecks.

Conclusion:

No, The statement “paying people more money makes them less poor” is not undeniably true. Some people are poor because they are bad with money.

If resolving this problem was as simple as a business owner to write an extra zero on the end of someone’s paycheck then it would’ve been solved long ago.

Artificially raising minimum wages means artificially raising the market value for that worker. What is undeniably true, Is that the same-skilled (same-value) worker, Is now more costly to the business, And thus keeping them hired would result in less profit. That is an undeniable fact. Whether you like it or not, $15 minimum wage will cause unemployment. Now the debate is just about outweighing the forced earning with those lost jobs.