Cure for Young Minority Unemployment: Snake Oil

I feel like I’m taking crazy pills. After reading an entire article on the problems that black and latino youth face in finding jobs, the author somehow concludes that hiking the minimum wage is a necessary step towards alleviating the problem. Actually, we are clued into the real intentions of the author by his suggestion that the federal minimum wage be raised to $10.10 an hour, which just so happens to be the minimum wage that President Obama has suggested, and the Senate will soon vote on. The article was more like an infomercial that addresses real problems, before offering a sham product.

As Sarah Ayres of the Center for American Progress points out, “With three job seekers for every available job, employers can hire people at an education level above what’s required for the actual position.” This trend benefits older workers.

Great, they understand the problem, I’m excited to see the solution.

Consequently raising the minimum wage to $10.10 an hour, lowering the wage gap between men and women, and expanding tax breaks for low-income workers—including those without children—would be great places to start. Together these programs would raise the incomes of tens of millions and lift millions more out of poverty.

Just one dose of snake oil, and you’ll be cured! I can’t understand who the target audience of this article is, as anyone who has learned to read should surely see how laughable these conclusions are. After spending 16 paragraphs lamenting the unfortunate rise in minority youth unemployment, somehow the solutions offered are to—apparently magically—lower the wage gap among people who are not necessarily young nor minorities. And as much as I’d love to delve into the wage gap debate, I’ll stay on target and let you explore an article by Jen Lade on the subject.

So then readers must further suspend disbelief to believe that tax breaks for people who have no jobs, and therefore no taxable income, will somehow help unemployed people get jobs. Let’s do the math: Jimmy makes $0 per year, and $0 of that is taxable income. With a tax break of 100%, Jimmy will be able to keep an additional $0 of his income. Yep that checks out, seems like tax breaks for the unemployed will certainly increase young black and latino employment prospects. Somehow the website that carries this article is apparently more successful than mine… maybe I should just start making stuff up and drawing erroneous, but caring sounding, conclusions?

Okay now back to the insane point at hand, that raising the minimum wage to $10.10 an hour will help decrease minority youth unemployment. This bit of logic may be a bit tough to follow, so try to stay with me: unemployed people do not have jobs. Only people with jobs will make more money when the minimum wage is raised.

Still with me? I know this economic mumbo jumbo is tough to understand. You might think that people who could not find a job that pays $7.25 an hour will somehow, through the omnipotence of government, be able to land the same job when it pays $10.10 an hour. Granted, the very same article says mere paragraphs earlier that 8 million people are looking for jobs, and ““With three job seekers for every available job, employers can hire people at an education level above what’s required for the actual position.” This trend benefits older workers.”

So when a job requires a $7.25/hour skill-set, but the government mandates minimum pay of $10.10/hour, people with a $10.10/hour skill-set will be hired to do a job that requires a $7.25/hour skill-set. And how do you gain a $10.10/hour skill set? By working a job with a required $7.25/hour skill-set, until you have learned enough to warrant pay of $10.10/hour. How do you gain those skills if you already need better skills to land your first job? You don’t.

So you reject the premise that anyone has different skill-sets, and assert that flipping burgers and running a $10 billion company could be done equally well by anyone. You decide that it is the system that is working against you, and since you have no control over your situation, you sign up for welfare and public housing, and go down to the polls to vote for the politician that expands welfare, increases public housing, and raises the minimum wage—because they care.

Now, I assume that supply and demand still exists, but I haven’t checked all the recent legislation to see if perhaps a “Repeal of the Economic Principle of Supply and Demand Act” has been passed. Unless such is the case, and 2+2 now equals 5, then we must assume that the supply of jobs will decrease when the amount of money available for jobs stays the same, but the amount of money spent per job increases.

So we just made fewer jobs available, and the jobs that are available more sought after. More people applying for each job means more employer choice, which means better skill sets will be required to get a job. We have also established that the trend of unemployment benefits older workers with better skills, and that older workers are in fact taking lower paying jobs at an increasing rate. So please, please, can someone explain to me how, absent the availability of pixie dust, raising the minimum wage will increase minority youth employment?

2 thoughts on “Cure for Young Minority Unemployment: Snake Oil

    • I say forget the minimum wage, just hand every American $100,000 a year so that nobody has to work, and our cups will runneth over. Or a million, and we can all drive lambos! Why haven’t our dear leaders thought of this yet?

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