Oops: Democrats Push Raising Minimum Wage, Blacks Lose Jobs

Democrats have constantly pushed for raising the minimum wage, and as a result of their zealotry, black male teens have lost their jobs.

The American Enterprise Institute pieced together black male teen (16-19 years old) jobless numbers from the Bureau of Labor Statistics. It found the jobless rate among this demographic spiked from 28.1 percent in May to 40.1 percent in June, the largest increase in a month since 1972.

The Foundation for Economic Education's Mark J. Perry connected the higher jobless rate among black male teens to fifteen minimum wage increases in both states an cities that occurred throughout the country on July 1, including Washington, D.C., Maryland, Oregon, and 11 cities including Los Angeles and Chicago.

As economist Thomas Sowell writes:

Low-income minorities are often hardest hit by the unemployment that follows in the wake of minimum-wage laws. The last year when the black unemployment rate was lower than the white unemployment rate was 1930, the last year before there was a federal minimum-wage law.

The following year, the Davis-Bacon Act of 1931 was passed, requiring minimum wages in the construction industry. This was in response to complaints that construction companies with non-union black construction workers were able to underbid construction companies with unionized white workers (whose unions would not admit blacks).

Indeed, a number of Democrats supporting Davis-Bacon at the time used explicitly racist rhetoric to argue in its favor. According to economist Walter Williams, Rep. William Upshaw (D-GA) railed against a "superabundance or large aggregation of Negro labor" and Rep. Miles Allgood (D-AL) whined about "colored labor" being "in competition with white labor throughout the country." Additionally, Gert Beetge, secretary of the Building Workers' Union in apartheid South Africa, supported a minimum wage to protect "white artisans."

The effects of the minimum wage are a matter of basic economics: by artificially inflating the cost of labor beyond market value via government mandate, businesses must pass off their increased operational costs to their employees (by eliminating jobs and/or reducing salaries and benefits), or to consumers (through higher prices and/or reduced quality of goods).

Radio host and constitutional scholar Mark Levin quotes University of California Irvine economics professor David Neumark and Federal Reserve policy wonk William Wascher in his book Plunder and Deceit: Big Government's Exploitation of Young People and the Future: "The higher wage rate causes [businesses] to substitute capital for labor in the production process ('the substitution effect'). As a result, the demand for labor falls." After studying the economic effects of the minimum wage for 20 years, Neumark and Wascher concluded that "minimum wages reduce employment of low-skilled workers."

"[W]e find it hard-pressed to imagine a compelling argument for a higher minimum wage when it neither helps low-income families or reduces poverty," write Neumark and Wascher.

The nonpartisan Congressional Budget Office came to a similar conclusion, as their research found that an increase in the minimum wage would result in 500,000 workers losing their jobs. Of those who would keep their jobs, 29 are in families with a household income three times the poverty level, while only 19 percent belong to families with an household income below the poverty level.

Williams also cites the following studies to show consensus among economists of minimum wage regulations' disastrous economic effects:

  • According to Neumark, 85 percent of over 100 academic studies found "a negative employment effect on low-skilled workers."
  • 90 percent of American Economic Association members said in 1976 survey that a higher minimum wage "raises unemployment among young and unskilled workers."
  • 80 percent of economists surveyed in a 1990 American Economic Review survey "agreed with the statement that increases in the minimum wage cause unemployment among the youth and low-skilled."

When SeaTac, a suburb in Seattle, WA, increased their minimum wage to $15 an hour, the following disastrous effects occurred, as compiled by Levin:

  • A restaurant in the Clarion Hotel went under.
  • One hotel employee "lost my 401k, health insurance, paid holiday and vacation" and a waitress now receives less in tips due to reduction in overtime pay.
  • Other businesses have had to put "more work in the hands of managers" and implement "a small 'living wage-surcharge' for a daily parking space near the airport."

Meanwhile, Neumark and Wascher found that on average, California day laborers – an unregulated job – make over $11 an hour, well-above the federal minimum wage, highlighting how unnecessary the minimum wage is.

Democrats push hard for raising the minimum wage at all levels of government despite the overwhelming evidence of such proposals' harmful economic effects. Their successes in implementing these policies has contributed to a spike in joblessness among black male teens. The racist Democrats of the 1930's must be overjoyed.


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