Race and Economics

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The National Industrial Recovery Act of 1933 and the Fair Labor StandardsAct of 1938 broadened the number of workers covered by minimum wages, with negative consequences for black employment across a much wider range of industries. Good intentions motivate most Americans in their support for minimum wage laws, but for compassionate public policy, one should examine the laws’ effect. That’s seen by putting oneself in the place of an employer and asking, “If I must pay $7.25 an hour to no matter whom I hire, does it pay me to hire a worker who’s so unfortunate as to have skills that enable him to produce, say, only $4 worth of value an hour?” Most employers would view hiring such a worker as a losing economic proposition; therefore, a minimum wage law discriminates against low-skilled workers by reducing employment opportunity.

Being unemployed has significant negative social consequences, one of them noted in the 1960s by Sen. Daniel Patrick Moynihan, who raised the alarm about the link between joblessness and the decline of the black family, saying that men without work become less attractive as marriage partners. Between 1890 and 1940, a slightly higher percentage of black adults had married than white adults. Today black marriage rates have fallen precipitously, where 72 percent of black children are born to unwed mothers.

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  • Jim

    the business men have been responsible for blocking attempts to restrict the entry of illegal aliens into the country. The illegals have bumped unskilled blacks from their traditional jobs.

    Yet no one cried racism. How come?

  • Ageofreason

    Labor unions have always been racist, and have always been progressive, socialist or outright Marxist. Racism and socialism are joined at the hip. A hundred years ago, it was the United Mine Workers who excluded Chinese workers in their contracts, and kept them out of the coal mines on the excuse that their lack of English made them dangerous. What the union punks failed to mention was that a huge proportion of the miners, new immigrants from Europe, spoke little English either, but glady backed the socialist unions. Wipe the filth off a union supporter and you'll find a racist under the dirt every time.

  • StephenD

    I recall as a young teen seeking employment with the qualifier that I'd work for 2 weeks and if they weren't happy with me they owed me nothing. I always found work. As far as $4. worth from a $7. per hr. worker, why not have a graded entry level wage rate? Almost like the apprentice programs for skilled labor. A modified version could be employed for just about any manual labor position. An unskilled man hired to operate an assembly machine gets hired at $5.00 per hour until the prescribed training is complete (say 4 weeks) then is automatically raised to the $7. per hour. I bet more companies would be hiring and more unemployed folks would be willing to participate.

  • lisag

    Isn't this why companies go overseas with their factories. Cheap, unending supply of labor. When your self image is of a rich rapper or super star athlete how likely are you to want to work for a small wage. What unemployed young black people need to realize is that there is dignity in working your way up. There is no dignity to being the father of kids who you either want aborted or ignore.

  • FlyanSosser

    I wonder how Affirmative-Action works into this mix. I mean, how many excuses do we need?