OBAMA'S CONTRIBUTION TO RAISE THE LEVEL OF THE BLACK UNEMPLOYED

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Minimum Expectations

 

BY JASON L. RILEY

 

THE WALL STREET JOURNAL ONLINE

 

There is something sadly ironic about watching the nation's first black president call for an increase in the federal minimum wage during his State of the Union address Tuesday.

Minimum-wage laws date to the 1930s, and supporters in Congress at the time were explicit about using them to stop blacks from displacing whites in the labor force by working for less money. Milton Friedman regarded the minimum wage as "one of the most, if not the most, anti-black laws on the statute books."

When you artificially increase the cost of labor, you wind up with surplus labor, which takes the form of unemployment. Younger and less-experienced workers—a disproportionate number of whom are black—are more likely to be priced out of the labor force when the cost of hiring someone goes up. Prior to the passage of minimum-wage laws—and in an era of open and rampant racial discrimination in the U.S.—the unemployment rate for black men was much lower than it is now and similar to that of whites in the same age group.

Today, unemployment stands at 7.9% overall but is 13.8% among blacks (versus 7% among whites), 14.5% among black men (versus 7.2% among white men) and 37.8% among black teens (versus 20.8% among white teens). Yet Mr. Obama has proposed increasing the minimum wage by 24% to $9 an hour to placate his union supporters who want less competition for their members. A higher minimum wage might lift earnings for existing workers—provided they keep their jobs—but it also reduces job opportunities for millions of people out of work.

Out of political expediency, Mr. Obama is putting the interests of Big Labor ahead of the urban poor. He's hardly the first politician to do so, and the reality is that Republican and Democratic presidents alike have raised the minimum wage. It's also true that Mr. Obama is president of the entire country, not just its black inhabitants. But is it too much to ask that he not support policies, however well-intentioned by current advocates, that were anti-black in origin and have a long history of depressing black employment?