Would you rather not work at all, earn $600/month for doing nothing, or $800/month working at $5/hour, which is several dollars below the minimum wage? Some would choose the second, some the third, but given a choice, I don’t think anyone would choose the first.
Yet, that is where some 55% of young African American males are in this country at the moment. They are unemployed, and not having worked long enough to draw unemployment, are not able to earn any honest income at all. Small wonder many turn to drug dealing.
This article is illuminating, although of course the basic argument has been in place since at least the 1940’s, and ignored by the people who benefit from pretending they care about the poor.
Since minimum wage laws discriminate against the employment of the least-skilled worker, it shouldn’t be surprising to find 16-to-24-year-old male high school dropouts its primary victims.
Among the white males, the authors find that “each 10% increase in a state or federal minimum wage has decreased employment by 2.5% ; for Hispanic males, the figure is 1.2%.
“But among black males in this group, each 10% increase in the minimum wage decreased employment by 6.5%.”
How does this work? Wages are a function of supply and demand. This is obvious, but I have been pondering it again as I am listening to Thomas Sowell’s excellent “Basic Economics” on CD (educating yourself while driving is a good use of time).
When you enact minimum wage laws in areas with high unemployment, you get a lot more applicants for work than you have jobs. This means that the applicants get cherry-picked. If the owners are racists, this makes it easy to not hire African Americans.
Yet are unemployed people better off working for little, or not working, for nothing? What would you prefer?
Leftist idiots ASSume they know what is best, so they insist on “fair” wages, that have the effect of increasing systemic unemployment. Most seriously, they make it so that high school dropout kids can’t get jobs of any sort, to get the sort of experience needed to get better jobs, and eventually to rise up into the middle class. The whole process is short-circuited.
You see, employers hire people for what they are worth. If they hire people for more than market value, then they eventually suffer business losses and go bankrupt. And they CAN’T hire people for less than they are worth, since no one will take those positions.
It is quite clear that much of urban blight is due to Minimum Wage laws. They are great for those with jobs, at least relative to those who can’t get a job at all.
Yet the simple fact is that if wages were allowed to drop to their natural level, then jobs that are now going to the Developing World would stay here. There are very poor people in both the cities and countryside who would work for what people in other nations are working for. To be clear: they have NOTHING now. They might get in unemployment the same paltry amount they would have received working for $4/hour. But that money teaches them NOTHING, and makes them less employable in the future. It makes things worse.
So it is no surprise that as Minimum Wages increase, so too does umemployment, in a more or less linear fashion that is MOST damaging to poor blacks.