Black Teens Are Fired When the Minimum Wage Rises

Black Teens Are Fired

It is no surprise that Black teens, 16- to 19-years old, are disproportionately unemployed. At the Great Recession’s bottom, African-American teens had an unemployment rate of nearly 50 percent while the rate for all teens was 27.1 percent. In the weak post-Recession, many teens compete for jobs against down-sized adults with college degrees.

And economists William Even from Miami University and David Macpherson from Trinity University report that when a state, or the federal government, increases the minimum wage, Black teens are more likely to be laid off. The duo analyzed 600,000 data points, which the Employment Policies Institute says included “a robust sample of minority young adults unprecedented in previous studies on the minimum wage.”

The report focused on 16-to 24-year-old males without a high school diploma and found that for each 10 percent increase in the federal or state minimum wage employment for young Black males decreased 6.5 percent. By contrast, after the same wage boost, employment for white and Hispanic males fell respectively just 2.5 percent and 1.2 percent.

The real hit for Black teens occurred, however, in the 21 states that had the federal minimum wage increase in 2007, 2008 and 2009.

The findings reveal that while 13,200 Black young adults lost their jobs as a direct result of the recession nearly 40 percent more, a total of 18,500, were fired because of the rise in the federal minimum wage, raising the researchers’ question: “Why do black males suffer more harm from wage mandates than their white or Hispanic counterparts?”

A key reason is that many young Blacks hold tenuous, low-skilled positions in the nation’s eating and drinking businesses, such as fast food restaurants. The researchers report “that nearly one out of three Black young adults without a high school diploma works in the industry.”

It is a sector that welcomes their entry, and lauds young Black workers in its ads. But African-American teens working in that highly-competitive industry with its narrow profit margins should know that their job is on shaky ground when the minimum wage rises.


Category: Forex

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