The minimum wage doesn't address underemployment.

The argument

The argument turns on a mismatch between the instrument and the population it is meant to help. A minimum wage operates on the hourly rate paid to someone who is working. It can only reach a household through a member who holds a job, and the size of its effect depends on how many hours that person works. Where a household has full-time employment at low pay, raising the floor raises its income directly. Where it does not, the policy has no channel through which to act at all. That is the position most poor households in the United States are actually in. Only 7% of families living in conditions of poverty in the US have a family member that works full time. The overwhelming majority, the other 93% of families living below the national poverty line, do not. Their difficulty is not that the hours they work are badly paid but that they do not have the hours: the problem is underemployment, unemployment, or work too intermittent for a change in the hourly rate to make a material difference. The consequence is a question of reach rather than of magnitude. However high the minimum wage is set, the policy can only ever touch the small share of poor families with full-time work. The other 93% are outside its scope by construction, and no increase in the rate brings them inside it. A measure that cannot reach nine out of ten of the people in a condition is not a solution to that condition, whatever its merits for those it does reach. Because policies affecting a minimum wage leave underemployment untouched, proponents of this position argue, a minimum wage is ineffective at reducing poverty.

Context

For many families, it is not low wages that contribute to conditions of poverty, but underemployment.

Premises

Counter-arguments

Implementing or increasing a legal minimum wage spurs job creation through increased demand. This might bring more adults into the workforce and allow for more families living in poverty to secure full-time work. Therefore, the assertion that policies governing a minimum wage would do little to lift families out of unemployment is incorrect.

Rejecting the premises

[Rejecting P2] Policies affecting a minimum wage create jobs, reducing unemployment and underemployment.

Framing

Underemployment is a larger driver of poverty than low wages.