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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.

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."

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

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    Perhaps a way to tackle this question is to look at other countries that have instituted minimum-wage laws. Then study the subsequent effects (demographics data) on any under-performing minority groups within that country. en.wikipedia.org/wiki/List_of_minimum_wages_by_country – John R Jul 22 '12 at 18:23
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    MINIMUM WAGES, LABOR MARKET INSTITUTIONS, AND YOUTH EMPLOYMENT: A CROSS-NATIONAL ANALYSIS "The average minimum wage effects we estimate using this sample are consistent with the view that minimum wages cause employment losses among youths." federalreserve.gov/pubs/feds/2003/200323/200323pap.pdf also: upload.wikimedia.org/wikipedia/en/thumb/0/07/Wage_labour.svg/… – John R Jul 22 '12 at 19:04
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    not a criticism of the question, but I have to point out the Milton Friedman is wrong because the law can not be racist by accident. It can have a disproportionate affect on a racial group, but the definitions of racism I find online all require a human to have a prejudice or belief against a group. The law itself would not qualify as racist unless it was created due to a prejudice held by the creators of the law. – dsollen Jan 19 '17 at 15:25
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+50

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)

  • Comments are not for extended discussion; this conversation regarding the lack of balance in this answer has been moved to chat. – Oddthinking Nov 12 '16 at 14:17
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    This is a good start, but I think there is another angle which should be considered to fully answer this question. The question asked if it was disproportionately harmful to African Americans. To consider the total harm one must consider those who lose employment and those who maintained employment and gained increased income. It could be the net effect was beneficial if only a very tiny minority lost their jobs while the majority had an increased income allowing them to peruse better options like education to improve themselves. – dsollen Jan 19 '17 at 15:18
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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".

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    Welcome to Skeptics! The first part of your post doesn't seem to answer the question, but just argue that we should ask different questions. The second part is better, but it would be a big improvement if you could quote a section from the article, and show how they know that. – Oddthinking Nov 16 '16 at 11:50
  • @Oddthinking ok let me see how to reword it as I was trying to keep the answer short and compact. – Cc Dd Nov 16 '16 at 11:51
  • @Oddthinking better? – Cc Dd Nov 16 '16 at 12:01
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    Minimum wage allows racist whites to give extra pay only to whites. Most blacks that deal drugs would love minimum wage if people were to hire them. But they're not hired. – user4951 Nov 17 '16 at 9:13
  • @JimThio good point that is sortof said in the last hired first fired part of my answer but it does not actually directly call the perpetrators white. I have not found any reliable data on exactly who but it certainly is not a stretch to simply see it. – Cc Dd Nov 17 '16 at 20:21

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