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The Minimum Wage’s Racially Discriminatory Roots

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The Minimum Wage’s Racially Discriminatory Roots

The Wall Street Journal February 16, 2021
EconomicsIncome InequalityEmployment

If the filibuster is a ‘Jim Crow relic,’ so is a policy designed to curtail the abundance of black labor.

Speaker Nancy Pelosi said last week that the House version of the next coronavirus aid package will include a $15 federal minimum wage, adding that “27 million people will get a raise, 70% of them women.”

In truth, Mrs. Pelosi has no idea how many people would see a raise because she doesn’t know how many people would keep their jobs. Employers may decide that they can’t afford to pay someone a $15 hourly wage, so workers could be let go or offered fewer hours as a result. A new Congressional Budget Office report estimates that 1.4 million jobs would vanish, and no one knows how many people would never be hired in the first place because they’ve been priced out of the labor force. Politicians gloss over these trade-offs, but they are basic economic facts of life.

Mrs. Pelosi’s reference to female workers is also misleading. Democrats have long held up single working moms as the typical minimum-wage earner, but that’s a myth. A 2014 analysis by economists Joseph Sabia and Richard Burkhauser found that the vast majority of workers who would benefit from a minimum-wage increase live in nonpoor households. According to Mr. Sabia, “only 13 percent of workers who would be affected live in poor households, while nearly two-thirds live in households with incomes over twice the poverty line, and over 40 percent live in households with incomes over three times the poverty line.”

Continue reading the entire piece here at The Wall Street Journal (paywall)

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Jason L. Riley is a senior fellow at the Manhattan Institute, a columnist at The Wall Street Journal, and a Fox News commentator. Follow him on Twitter here.

Photo by Alex Wong/Getty Images

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