Monday, December 18, 2006

Diversity, Yes; Force, No

Prior to the first federal minimum wage bill passed on the 1930s, there was virtually no difference between black and white teenage (i.e., unskilled) unemployment, at a time when many assume that racism was more prevalent than today. After the minimum age bill is passed, however, we see an increase in black teenage unemployment relative to whites, since as employers are now forced to pay a wage that is higher than the value of many workers' marginal revenue product, they no longer incur a market penalty for allowing racism to dictate their market decisions.

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# posted by GumboFilé : 7:59 PM
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