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Although minimum wage laws in the United States apply without regard to race, that does not mean that their impact is the same on blacks and whites alike. Where rates of pay are determined, not by supply and demand in a free market, but are imposed by minimum wage laws, that can affect the cost of Discrimination II to the discriminator. A wage rate set above where it would be set by supply and demand in a freely competitive market tends to have at least two consequences: (1) an increase in the number of job applicants, due to the higher wage rate, and (2) a decrease in the number of workers actually hired, due to labor’s having been made more expensive. In this situation, the resulting chronic surplus of job applicants beyond the number of jobs available reduces the cost of refusing to hire qualified job applicants from particular groups, so long as the number of qualified job applicants refused employment is not greater than the number of surplus qualified applicants. When, for example, the number of qualified black job applicants refused employment can be easily replaced by otherwise surplus qualified white or other job applicants, that reduces the cost of Discrimination II to the discriminating employer to virtually zero. On the most basic economic principles, such a situation makes racial or other discrimination far more affordable by employers, and therefore more sustainable, than in a situation where wage rates are determined by supply and demand in a free, competitive market. In the latter case, where supply and demand leave no chronic surplus or chronic shortage of labor, qualified black job applicants turned away have to be replaced by attracting additional other qualified job applicants from other groups by offering higher pay than what that pay would be by supply and demand in a freely competitive and non-discriminatory labor market. In other words, Discrimination II has costs in a free market, greater than its costs when a minimum wage law creates a chronic surplus of job applicants. Empirical evidence is consistent with this hypothesis. The prevailing national minimum wage law in the United States is the Fair Labor Standards Act of 1938. However, high rates of inflation that began in the 1940s put virtually all money wages above the level specified in that Act, so that for all practical purposes, there was no minimum wage in effect a decade after the law was passed. As economist George J. Stigler pointed out in 1946, “The minimum wage provisions of the Fair Labor Standards act of 1938 have been repealed by inflation.” As of 1948, during this period of no effective minimum wage law, the unemployment rates of both black and white teenagers were just a fraction of what they would become in later years, as minimum wage rates began rising in the 1950s to catch up, and then keep up, with inflation in later years. What is particularly striking, however, is that there was no significant difference between the unemployment rates of black and white teenagers in 1948. The unemployment rate for black 16-year-old and 17-year-old males was 9.4 percent. For their white counterparts, the unemployment rate was 10.2 percent. For 18-year-old males and 19-year-old males, the unemployment rate was 9.4 percent for whites and 10.5 percent for blacks. In short, there was no significant racial difference in unemployment rates for teenage males in 1948 when there was no effective minimum wage. After the effectiveness of the minimum wage law was restored by recurring minimum wage increases in later years, not only did teenage unemployment rates as a whole rise to multiples of what they had been in 1948, black teenage male unemployment rates became much higher than the unemployment rates for white teenage males—usually at least twice as high for most years from 1967 on into the twenty-first century.Labor force #!$%@? rates tell much the same story. As of 1955, labor force #!$%@? rates were virtually the same for black and white males, aged 16 and 17. For 18-year-old and 19-year-old males, blacks had a slightly higher labor force #!$%@? rate than whites, as was also true of males aged 20 to 24. But this pattern changed drastically, as minimum wage rates rose over the years. In the mid-1950s, black labor force #!$%@? rates for 16-year-old and 17-year-old males began falling below that of their white counterparts, and the gap grew wider in succeeding decades. For males aged 18 and 19, the same racial reversal in labor force #!$%@? rates occurred a decade later, in the mid-1960s. For males aged 20 to 24, that same racial reversal occurred at the beginning of the next decade, in 1970. The magnitude of the racial difference in labor force #!$%@? rates among males, after the racial reversal, followed the same pattern, being greatest for the 16-year-olds and 17-year-olds, less for males aged 18 and 19, and least for males aged 20 to 24. These labor force #!$%@? patterns shed additional light on the basis for racial differences in employment. If the primary reason for that racial difference in labor force #!$%@? rates was racism, there was no reason for such reversals, and especially reversals in different years and with different magnitudes for different age groups. People who are black at age 16 remain black as they get older, so there is no basis for racists to change their treatment of blacks in such patterns as black workers age. But, if the real reason for these patterns was that the work experience and job skills of younger black workers made them less in demand than older black workers with more work experience and/or more job skills, then a rising minimum wage rate prices the younger blacks out of jobs first and to the greatest extent. Unfortunately, when minimum wage laws reduce the employment prospects of inexperienced and unskilled black teenagers, that reduces their labor force #!$%@?, and therefore reduces their rate of acquisition of work experience and job skills. Whatever the degree of racism, it cannot explain age differences in employment among young black males, who do not change race as they grow older. This pattern of virtually no difference in unemployment rates between black and white teenagers when wages were determined by supply and demand in a free market, but with large and enduring racial differences in unemployment rates when minimum wage laws became effective again, also fits the economic principle that a chronic surplus of job applicants reduces the cost of discrimination to the employer. This pattern establishes correlation between increased minimum wage rates and changing racial differences in unemployment among teenagers. If this does not conclusively prove causation, it does at least establish a remarkably persistent coincidence. Alternative explanations for these changing patterns of racial differences—such as racism, poverty or inferior education among blacks—cannot establish even correlation with changing employment outcomes over the years, because all those things were worse in the first half of the twentieth century, when the unemployment rate among black teenagers in 1948 was far lower and not significantly different from the unemployment rate among white teenagers.

Discrimination and Disparities (Thomas Sowell)

Ci za placa minimalna - popieracie polityke rasistowska. Wstydzcie sie.

#neuropa #4konserwy #libertarianizm #ekonomia #sowell

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@PanLogik: kto przeczytał całość jak ja w 10 sekund daje plusa.

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@dziabarakus:
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