Do minimum wage laws disproportionately harm black employment?

Question

There is a common claim that applying minimum wage laws impacts the poorer members of society, and thus impacts poorer minorities, such as blacks, more than others.

Milton Friedman openly argued that minimum-wage laws are racist in effect if not intent; in the early 1960s, he pointed out that, as a result of higher minimum wages, black teenage unemployment was much higher than it would otherwise be. Denied the opportunity to earn incomes and to acquire valuable skills, those adversely affected by the minimum wage were not allowed to share in the general prosperity that a market economy produces. Empirical evidence reported by economists David Neumark and William Wascher suggests that among the long-run effects of minimum wages are lower degrees of educational attainment, less on-the-job training, and lower lifetime earnings.

• Source

This view wasn't held by, for example, Martin Luther King:

Two years earlier on March 18, 1966, King had called for Congress to boost the minimum wage. "We know of no more crucial civil rights issue facing Congress today than the need to increase the federal minimum wage and extend its coverage," he said. "A living wage should be the right of all working Americans."

• Source

Does the minimum wage disproportionately harm black unemployment rates while increasing the salary of white people?

Answer 1

This study indicates both that the minimum wage decreases overall employment and minority employment disproportionately, although that sensitivity can sometimes be overstated.

...most if not all of the recent studies indicate a greater sensitivity to changes in the minimum wage on the part of teenagers, non-whites and the low skilled, generally, than is true of other groups. Job losses due to higher minimum wages may contribute to higher unemployment rates among youth in general, and minority youth in particular.

The National Review found source

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.

Also in the same article Dr. Thomas Sowell notes that the minimum wage laws were originally designed to lower employment rates of blacks.

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)

Answer 2

Yes, minimum wage laws can create racially biased employment conditions. We need to first look at general racial bias and discrimination in workplaces. In their conclusion they confirm that blacks are first to go and typically last to come back. The "data" section along with the sections proceeding it show how they collected and used the data.

The discrimination, mentioned above, can crop up when companies decide to lay people off. Layoffs can happen in the wake of minimum wage increases as shown in this study. Job loss estimates can be found on page 13. Appendix A subsection "How CBO Estimated the Total Effects of the Options on Employment" goes into detail about how they calculated their figures.

Raising the minimum wage would in general impact the poorer rungs of society due to the job losses as estimated on page 13. However this impact should only be temporary since a side effect of increasing minimum wage is increased spending from minimum wage workers leading to more jobs as explained on page 11. If you want to know how they came to this conclusion there is more reading under Appendix A subsection "The Increase in Demand for Goods and Services".