Raising the minimum wage effectively eliminates entry-level jobs. That is conclusion of most academic studies. And the greatest negative impact is on teenage unemployment.
That is why Larry Elder wrote to Jane Fonda before she went to Detroit to campaign for a higher minimum wage. He quoted from economist David Neumark who examined all of the major academic minimum-wage studies from the previous two decades. Of these more than 100 studies, 85 percent found that minimum-wage laws destroy jobs and cause workers to lose jobs.
Larry Elder didn’t mention the other few studies that did not show this, but I will. David Neumark and his colleagues even went back and examined one study sometimes cited by proponents of minimum wage. They raised serious question about the research methods that were used and the conclusions that were drawn.
Teen unemployment has been above 20 percent for years, and it has been above 30 percent for black teenagers. Larry Elder says: “Believe it or not, before minimum-wage laws took effect, a black teenager was actually more likely to have a job than a white teen.”
When he was alive economist Milton Friedman called the minimum wage law “one of the most, if not the most, anti-black laws on the statute books.” He explained: “The do-gooders believe that by passing a law saying that nobody gets less than $2 an hour or $2.50 an hour, or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure that people whose skills are not sufficient to justify that kind of a wage will be unemployed.”
There are many things we can and should do to help black teenagers in Detroit get jobs. But increasing that minimum wage is not the way to do it.