Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases

Increases in minimum wage are very popular with politicians--Democrats run on it, and Republicans don't want to appear to be meanies, so they shuffle along and agree to it. But it is those in the lowest job ranks who get cut first as employers look for ways to save (it doesn't increase their income, you know). When Democrats took over both houses in 2007, it was the first step downward for the coming recession--hit employers hard, then the poor. And most of all, young and black. Unemployment in the current recession is about 25% for young white males without a high school diploma, but 50% for young blacks. But why?

The authors find that they’re more likely to be employed in eating and drinking places–nearly one out of three black young adults without a high school diploma works in the industry. Businesses in this industry generally have narrow profit margins and are more likely to be adversely impacted by a wage mandate. There’s also substantial variation in regional location, as black young adults are overwhelmingly located in the South and in urban areas.

Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases | EPI Study

Here's how one small businessman (RV parks in Arizona) handled the problem of a 41% increase in 2 years of minimum wage in a heavily labor intensive business. In his case, it was the retirees who were let go, a trade off of experience for younger, faster, healthier workers.