Walter E. Williams

The unemployment effect of minimum wages isn't restricted to American Samoa but to the mainland U.S. as well. Overall teenage unemployment stands at a record 25 percent while adult unemployment hovers around 10 percent. Also at a record high is the 50 percent unemployment rate among black teenage males. One might ask why teen unemployment, particularly that among black teens, is so much higher than adult unemployment. The answer is simple. One effect of a minimum wage law is that of discrimination against the employment of less-preferred workers. Within the category of less-preferred workers are those with low skills. Teens are disproportionately represented among such workers and are therefore more adversely affected by minimum wages. Black teens are disproportionately represented among teens with low skills and therefore share a greater burden of minimum wages.

One of the more insidious effects of minimum wages is that it lowers the cost of racial discrimination; in fact, minimum wage laws are one of the most effective tools in the arsenals of racists everywhere, as demonstrated by just a couple of examples. During South Africa's apartheid era, its racist unions were the major supporters of minimum wages for blacks. South Africa's Wage Board said, "The method would be to fix a minimum rate for an occupation or craft so high that no Native would likely be employed." In the U.S., in the aftermath of a strike by the Brotherhood of Locomotive Firemen, when the arbitration board decreed that blacks and whites were to be paid equal wages, the white unionists expressed their delight saying, "If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain."

Tragically, minimum wages have the unquestioned support of good-hearted, well-meaning people with little understanding who become the useful idiots of charlatans, quacks and racists.


Walter E. Williams

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'
 
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