What’s This About?Raising the minimum wage is a prominent issue in economic policy, with significant implications for workers, businesses, and the broader economy. While some economists advocate higher salaries, others assert that raising the minimum wage can spawn new problems. The two panelists will now present their arguments, with one arguing in favor of raising the minimum wage and the other arguing against it.
Constructive
Pro Finn
Governments must raise the minimum wage. There are many reasons to do so, but primarily, many minimum-wage workers cannot meet basic living expenses even while working full-time. By increasing their earnings, these workers can achieve a higher standard of living and even lift themselves and their families out of poverty. Higher wages would also improve health outcomes as individuals could afford healthier food, better housing, and health care. Reports from the Korea Institute for Health and Social Affairs support this conclusion, showing improvements in health indicators among low-wage workers following minimum wage hikes, including fewer reported mental health problems and better access to healthcare services. Furthermore, a wage increase would narrow the income gap between low-wage workers and high-income earners, leading to a more equitable distribution of wealth.
Con Alice
While the intention behind raising the minimum wage is noble, it can lead to unintended consequences that may harm the very people it aims to help. One of the primary concerns is the potential for job losses. Small businesses with tight profit margins may be unable to absorb the increased labor costs, leading them to reduce their workforce, cut employee hours, delay hiring, or even close down. It would result in higher unemployment, especially among low-skilled workers and younger individuals entering the workforce. Moreover, raising the minimum wage can increase prices for goods and services as businesses pass on the increased labor costs to consumers. This inflationary pressure can erode the purchasing power of consumers, offsetting the overall benefit of the wage hike with the higher cost of living.
Rebuttal
Pro Finn
While it is true that raising the minimum wage can lead to job losses, such effects are generally minimal. More importantly, you have to consider the long-term benefits of increasing wages. For one, higher wages can improve employee morale and job satisfaction, which, in turn, can reduce turnover rates. Better-paid workers are more likely to stay with their employer, meaning companies can cut costs in hiring and training new employees. Furthermore, better-paid employees tend to be more productive and committed. Research by the Harvard Business Review indicates that companies offering higher wages see reduced absenteeism and increased worker efficiency. In addition, a livable wage would alleviate the financial stress that often leads to criminal activity. Thus, raising the minimum wage would result in lower crime rates and safer communities.
Con Alice
There are concerns that a higher minimum wage may adversely affect youth employment and reduce opportunities for skills development. Employers may be less inclined to hire young and inexperienced workers for entry-level positions at higher wage rates, thus hindering their ability to gain valuable work experience and skills essential for their long-term career development. Businesses might respond to the higher labor costs by investing more in automation and technology to replace workers, reducing employment opportunities for those who need them most. Raising the minimum wage may also increase “off-the-books” employment as businesses seek to circumvent higher labor costs. Such employment often lacks job security, benefits, and legal protections, leaving workers vulnerable to exploitation and abuse. As I mentioned before, though the goal is admirable, there are broader implications that we must consider.
Judge’s Comments
Thank you both for your insightful arguments. The debate on raising the minimum wage is complex, involving economic, social, and ethical considerations. After hearing both sides, what do you, the audience, think about this issue?