A minimum wage reduces poverty

The argument

The case rests on what happens to wages when nothing holds them up. Left to its own devices, the free market creates a race to the bottom: workers are forced to compete with others for work, and competing means being willing to accept lower salaries than the next person. Each worker's acceptance of a lower wage makes that wage the going rate, so the pressure is continuous and falls hardest on those least able to refuse. Nothing within the process stops it at a level anyone could live on, because the floor is set by what the most desperate applicant will accept rather than by what the work is worth or what it costs to survive. A minimum wage interrupts that dynamic by putting a platform at the bottom. It removes the option of underbidding below a fixed level, which means a worker can no longer be made to choose between accepting poverty wages and having no work at all, and an employer can no longer obtain labour at a rate that competition alone would have driven down to. The effect on poverty follows directly from where the platform is set. Guaranteeing workers an annual income above the national poverty line ensures that full-time work does not leave a person poor, which is what the race to the bottom otherwise produces, and it ensures that no workers are underpaid and exploited in the way an unconstrained market permits, because the terms that would allow it have been placed out of reach. The platform prevents anybody from sliding into conditions of poverty through employment itself. Because a minimum wage reduces poverty in this way, the minimum wage is good for workers.

Context

A legally guaranteed minimum wage ensures that all workers can earn enough to put them above the poverty line.

Premises

Counter-arguments

A minimum wage does not reduce poverty. It benefits workers who have jobs, and keeps them from becoming impoverished, however, it reduces the volume of jobs available, leading to layoffs among less-experienced workers. For example, when Seattle increased its minimum wage, less experienced workers lost their jobs, forcing more onto government welfare programs. The establishment or raising of a minimum wage doesn't reduce poverty, it increases through elevated unemployment levels and increased reliance on social security.

Rejecting the premises

[Rejecting P2] Minimum wages do not reduce poverty because they increase unemployment.