Unemployment for Black Male Teens Spikes. Are Minimum Wage Increases to Blame?
Acton Institute Powerblog

Unemployment for Black Male Teens Spikes. Are Minimum Wage Increases to Blame?

The most recent jobs report appeared to present a positive impression of our current employment situation. As the New York Times headline read, “Jobs Roar Back With Gain of 287,000 in June, Easing Worry.”

Of course whether it eased your worry or not largely depended on whether or not you’re a young African American man. For black male teens (aged 16-19 years), the jobless rate dramatically spiked to 40.1 percent in June from 28.1 percent in May.

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As Mark J. Perry notes, “Except for a slightly higher increase of 12.2 percentage points during the aftermath of the Great Recession, the 12 percentage point increase in June was the highest monthly increase in history going back to 1972 when the BLS starting keeping records for this series.”

What could have caused the spike in unemployment? Perry suggests that it might be because of the “midyear burst of minimum-wage increases” that began on July 1. On that day 14 U.S. cities, states and counties, plus the District of Columbia, raised their minimum wage.

It may be too soon to blame the increased unemployment on the minimum wage increases. But the effect is exactly what we should expect to happen. After all, employment among African American males between the ages of 16 and 24 is disproportionately responsive to the minimum wage.

A ten percent increase in the minimum wage has been shown to reduce employment by 2.5 percent for white males between the ages of 16 and 24, 1.2 percent for Hispanic males between the ages of 16 and 24, and 6.5 percent for African American males between the ages of 16 and 24. Economists William Even and David Macpherson estimate that in “the 21 states fully affected by the federal minimum wage increases in 2007, 2008, and 2009,” young African Americans lost more jobs as a result of minimum wage hikes than as a result of the macroeconomic consequences of the recession.

“The people who have been hurt most by the minimum wage laws are the blacks,” said Milton Friedman in 1979. “I have often said that the most anti-black law on the books of this land is the minimum wage law.” The latest jobs report appears to show that Friedman was right. But where and when will it end? How many African American teens must be unemployed before we accept the reality that minimum-wages laws harm the most vulnerable workers?

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).