Economist Thomas Sowell has consistently argued that minimum wage laws, despite their stated intentions to aid the poor, have created "disastrous levels of unemployment among young blacks." Sowell contends that the economic consequences of these laws disproportionately harm less-skilled and entry-level workers, particularly young Black individuals seeking employment. His long-standing position challenges the common perception of minimum wage as a purely benevolent policy.
According to Sowell, minimum wage legislation acts as an artificial price floor for labor, making it economically unfeasible for employers to hire workers whose productivity does not justify the mandated wage. "Liberals try to show their concern for the poor by raising the level of minimum wage laws. Yet they show no interest in hard evidence that minimum wage laws create disastrous levels of unemployment among young blacks in this country," Sowell stated in a recent social media post. This economic principle, he explains, leads to a surplus of labor, manifesting as unemployment, especially for those with fewer skills or less experience.
Historical data cited by Sowell indicates a significant shift in employment patterns following the implementation and escalation of federal minimum wage laws. In 1948, the unemployment rate for Black 16- and 17-year-old males was approximately 9.4 percent, a figure that was sometimes lower than or comparable to their white counterparts. However, after subsequent increases in the minimum wage, Black teenage unemployment rates soared, often exceeding 30 to 40 percent in later decades, a trend that has persisted.
Sowell, a senior fellow at Stanford University's Hoover Institution, emphasizes that the "real minimum wage is always zero" for those who cannot find employment due to these laws. He points to the stark contrast between pre-minimum wage employment figures and those after the Fair Labor Standards Act of 1938 and subsequent amendments. This perspective underscores a critical economic reality where well-intentioned policies can lead to unforeseen and detrimental outcomes, particularly for vulnerable populations.