If you still believe the myth that minimum wage increases help those at the bottom of the economic ladder, Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases, a new research study by William E. Even of Miami University and David A. Macpherson from Trinity University, will give you some food for thought.

As unemployment rates soared to over 10 percent, the highest since the early 80s, those just staring their working life, 16 to 19 year olds, took the brunt of the impact. The unemployment rate for this group grew to 27.1 percent.  For black teens it’s even worse.  50% of black teens are unemployed, and the rate is 55% for young black men.

While many will conclude that the recession is to blame and others will assert “they just don’t want to work”,  the truth is, the  increase in the minimum wage has priced young, inexperienced and untrained workers out of the job market.

Drs. Even and Macpherson focus on 16-to-24 year-old males without a high school diploma, a group that previous studies suggest are particularly susceptible to wage mandates. Among white males in this group, the authors find that each 10 percent increase in a federal or state minimum wage decreased employment by 2.5 percent; for Hispanic males, the figure is 1.2 percent.

But among black males in this group, each 10 percent increase in the minimum wage decreased employment by 6.5 percent. The effect is similar for hours worked: each 10 percent increase reduced hours worked by 3 percent among white males, 1.7 percent for Hispanic males, and by 6.6 percent for black males.

Even and Macpherson don’t lay all of the blame at the feet of minimum wage, certainly the recession had a significant impact, but as you can see from the table below, a significant percentage, especially for blacks, is traceable to increases in minimum wage.Larry Downes – Minimum Wage Fraud: Interview with Dr. Walter Williams

From the study, Unequal Harm

Causes of unemployment increases from the study, Unequal Harm


Dr. Walter E. Williams

Dr. Walter E. Williams, George Mason University

I had the pleasure of talking with Dr. Walter E. Williams about this study and the effects of minimum wage in general. I’ve included it here if you missed it live on 93.1 WIBC.

Organized Links:

The Study:
Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases

Dr. Walter E. Williams:
Website

Race and Economics: How Much Can Be Blamed on Discrimination?

 

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