Minimum wages reduce gender and racial income gaps

The argument

Women account for roughly 49% of the US labour force, but make up 55% of workers earning less than $10.10 an hour. Similarly, around 13% of the US population is black or African American and 18% are Hispanic or Latino, yet 22% of families earning less than 200% of the federal poverty level are black, and 30% are Hispanic. The fact that women and minorities are overrepresented among the lowest earners means that they stand to gain the most from policies affecting the minimum wage.

Context

The establishment of a minimum wage benefits the lowest earners in the labour pool. These are overwhelmingly women and ethnic minorities.

Premises

Counter-arguments

Overrepresentation at the bottom cuts both ways. A higher minimum wage raises pay for low-wage workers who keep their jobs, but if it also reduces employment or hours, the women and minority workers concentrated at the bottom would bear a disproportionate share of those losses too. The same fact the argument relies on — that these groups cluster in low-wage work — means they are also the most exposed to any disemployment effect. So the data show who is affected by minimum-wage policy, not that the net effect is unambiguously to narrow gender and racial income gaps.

Rejecting the premises

[Rejecting P2] Concentration at the bottom means these groups also absorb more of any job or hour losses from a higher minimum wage, so the net effect on income gaps is ambiguous rather than clearly positive.