Walter Williams takes a dim view proposals to raise the minimum wage. I wonder that this topic keeps coming back. By now I would have expected literate people to realize that raising the minimum wage pushes low end wage earners off bottom rungs of the economic ladder.
Bureau of Labor Statistics unemployment data confirms the economic prediction about minimum wage effects. Currently, the teen unemployment rate is 16 percent for whites and 32 percent for blacks. In 1948, the unemployment rate for black teens (16-17) was lower (9.4 percent) than white teens (10.2 percent). Plus, black teens were more active in the labor force.
How might we explain that? How about arguing that there was less racial discrimination in 1948, or back then black teens were more highly educated than white teens? Of course, such arguments would be nonsense. The fact of the matter is that while there was a minimum wage of 40 cents an hour prior to 1948, it had been essentially repealed by the post-World War II inflation; however, with successive increases in the minimum wage, black teen unemployment rose relative to white teens to where it has become permanently double that of white teens.
To believe in a beneficial effect of having a minimum wage you have to believe that a segment of society is permanently and severely incompetent. Of course, if you can exert some control over education systems, as teachers unions do and as the lefty politicians they support do, you have some chance of making that belief a reality.
Comments