Probably the most vulnerable, at-risk group in the labor market would have to be black male teenagers, judging by the 44.3% jobless rate for that group in November. In contrast, the jobless rate for white male teens in November was less than half the rate of their black counterparts (19.8%); for male Hispanic teens the jobless rate in November was 26.4%, and for the general population it was 6.6%. (Note: All rates are reported as “not seasonally adjusted” rates because the Hispanic male teen jobless rate is only available without seasonal adjustment.)
A question for proponents of the minimum wage, including President Obama, would be: Given a current jobless rate of 44.3% for black male teens, would that group of America’s most vulnerable and unemployed workers receive any benefits from a 39% increase in the minimum wage from $7.25 to $10.10 per hour? Or would they most likely suffer from a minimum wage increase?
I would argue that whatever benefits there might be for some workers who might manage to keep their job (or find a job) following a 39% increase in the minimum wage to $10.10 per hour, the nearly 100,000 unemployed black teenage males who are currently looking for, but unable to find a job, would find it even more difficult to find a job than they do now, and the jobless rate for that group would go up, ceteris paribus. One reason – when the minimum wage goes up, the cost of discriminating against minorities and unfavored groups goes down, which would increase the amount of discrimination in the labor market, ceteris paribus.
As Milton Friedman explains in a video at this link:
The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills. That’s what the law says. The law says that here’s a man who has a skill that would justify a wage of $5 or $6 per hour (adjusted for today), but you may not employ him, it’s illegal, because if you employ him you must pay him $10 per hour. So what’s the result? To employ him at $10 per hour is to engage in charity. There’s nothing wrong with charity. But most employers are not in the position to engage in that kind of charity. Thus, the consequences of minimum wage laws have been almost wholly bad. We have increased unemployment and increased poverty.
Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.
There is absolutely no positive objective achieved by the minimum wage law. Its real purpose is to reduce competition for the trade unions and make it easier for them to maintain the higher wages of their privileged members.
MP: One adverse effect of the minimum wage is its disproportionate, negative effect on minorities, especially African-Americans. And yet we never hear anything from President Obama and other minimum wage proponents about how the increase in the minimum wage to $10.10 would have disastrous effects on our most vulnerable populations, e.g. black teenage males suffering already from a jobless of more than 44%. I would like to hear from minimum wage proponents who don’t think that the law adversely affects minorities. And how can a black president support what Milton Friedman described as “the most anti-black law on the books of this land?
Bottom Line:Graphic via NY18DistrictForum.