1NC – Minimum Wage

Increased minimum wage raises the pay of 25% of workers---spills over to pay hierarchies and eliminates discriminatory practices

Center for American Progress 18 (independent, nonpartisan public policy research organization), “Blueprint for the 21st Century; A Plan for Better Jobs and Stronger Communities,” 05/14/2018, https://www.americanprogress.org/article/blueprint-21st-century/#:~:text=The%20Blueprint%20for%20the%2021st%20Century%2C%20or%20Jobs%20Blueprint%2C%20proposes,of%20bargaining%20power%20of%20those

Even with increased state action in recent years, too many working families are unable to secure a living wage on the job. In 2016, about 39 percent of employed workers lived in states that have not set minimum wages above the federal level. Black workers (49.8 percent) and workers without four-year college degrees (40.6 percent) are even more likely to live in these low minimum wage states.253 And while Arizona, California, Colorado, Maine, New York, and Washington state have approved future minimum wages above $12,254 other states have yet to enact laws to move their minimum wages above this threshold and closer toward a living wage.

Federal policymakers should right this wrong by immediately raising the pay of millions of workers, eliminating the discriminatory subminimum wages for tipped workers and workers with disabilities,255 and setting the federal minimum wage on a path to reach $12 per hour by 2020 and $15 per hour in 2024, indexed thereafter to the median wage.256

The Economic Policy Institute estimates that by 2024, these policies would directly raise the wages of 22.5 million workers—29 percent of American workers—who would, on average, receive a $5,100 annual raise.257 Minimum wage increases also tend to boost the pay of workers who make just above the new minimum wage, since employers tend to maintain internal pay hierarchies after minimum wage increases are implemented.258 This indirect effect would result in higher wages for 19 million workers whose employers would raise their hourly pay above $15.

A $15 minimum wage would be a huge benefit for workers currently struggling to support themselves and their families. Contrary to claims that often emerge in the minimum wage debate, this wage increase would affect vastly more workers than just teenagers—a full 90 percent of its beneficiaries are aged 20 or older. Nearly 1 in 4 prime-aged workers—those ages 25 to 54—would see their pay grow as a result of a $15 minimum wage in 2024. Workers with less than a college degree would be especially likely to see benefits from this minimum wage level: Nearly 4 in 10 of these workers would be affected compared to about 10 percent of workers with a bachelor’s degree or more.259

An increase in minimum wage solves productivity---changing thinking ensures future increases are more efficient

Levin-Waldman 14 [Oren Levin-Waldman; Professor of Public Policy at Metropolitan College of New York, USA. He is also Research Scholar at the Binzagr Institute for Sustainable Prosperity; 3/21/14; “The Minimum Wage is Really an Efficiency Wage”; https://www.usw.org/blog/2014/the-minimum-wage-is-really-an-efficiency-wage]

In other words, instead of thinking of the minimum wage as a social negative because of supposed employment effects, it is time to think of it more as the efficiency wage it could be intended to achieve greater productivity and prosperity. The idea of the minimum wage as an efficiency wage dates back to a famous essay by Sidney Webb in 1912, and is ironically recognized by the competitive market model. Webb argued that better paid workers would be able to better maintain themselves, and because that meant they would be eating better they would come to work with more energy and naturally work more efficiently. But higher wages would also improve their morale, as they would feel better about the work they were doing. This would lead them to put more effort into their jobs. Employers too would see that their workers were working harder and would seek to invest more into their improvement in order to justify the higher wage. Consequently, overall efficiency would improve, thereby leading to increases in productivity. The notion that a minimum wage improves efficiency is often referred to as the “Webb” effect. But it has found expression in the competitive market model, albeit in a slightly different, if not somewhat bizarre form. In a famous paper about 30 years ago, Nobel laureate Joseph Stiglitz — who more recently has been arguing about the dangers of rising income inequality — along with Carl Shapiro argued that the minimum wage can be an efficiency wage to the extent that employees earning higher wages will take steps to avoid shirking. Employees who receive higher wages have a stronger incentive to hold onto their jobs because the costs associated with job loss. Moreover, employers also derive benefit because the costs of higher wages are offset by savings in monitoring costs. Of course, the anti-shirking argument isn’t a whole lot different from the Webb effect. The former couches it in the standard economics language of incentives and disincentives, whereas the latter suggests that improved efficiency flows from improved morale. One is merely more easily quantified than the other. Still, the idea is the same. Higher wages lead to greater efficiency for the simple reason that better paid workers not only have greater incentive to put more effort into their work, but they have less incentive to pick up and leave. In other words, employers who pay higher wages don’t have to lay off workers or necessarily raise prices in order to prevent the increase from eating into profits. They can save money from reduced turnover, which only decreases the costs of recruitment and retraining. It would appear that amidst the national policy debate over whether to raise the minimum wage to $10.10 an hour as being pushed by Democrats in Congress and the President, some employers have come to recognize that there really is greater efficiency to be derived from higher wages. Consider that Cosco pays its workers an average of $20 an hour because it wants to keep its employees. The Gap recently announced that it would be raising its minimum wage to at least $9.00 an hour because it too doesn’t want to lose good employees. A spokesperson for the national chain actually said they were committed to investing in its workforce. The American Consumer Satisfaction Index recently reported that those stores with the lowest levels of consumer satisfaction were also not surprisingly among those paying the lowest wages. That alone should be a warning. One gets what one pays for. Consumers dissatisfied with the service they are getting will naturally go elsewhere. Paying a higher wage, then, is not as some on the right would derisively label a “feel-good” measure, but in the end is about the bottom line. We cannot continue to be a prosperous nation if we cling to the belief that efficiency is defined as greater output for less input, including labor costs. The market place is not simply a place to pursue our own selfish interests with total disregard for our neighbors. That is a gross misreading of Adam Smith. Rather, the market place is the way we achieve the most efficient organization of the greatest number of people for achieving a common purpose: prosperity. People forget that Smith was above all a moral philosopher. It would be nice if more low-wage employers on their own could come to recognize the greater efficiency in higher wages. As most still cling to the first part of the competitive market model, wages need to be increased through policy. Were a minimum of $10.10 to be adopted and then indexed to either the inflation rate or productivity increases, all future increases could then be planned for because they would be anticipated. This then would be less of a shock to the system, which again would only improve efficiency. It is time to recognize the efficiency benefits of the minimum wage.