Oracle of Liberty

Constitutional Liberty and Economic Common Sense

Education, Unemployment and Minimum Wage


A debate has raged in this country as to the reasons why unemployment is at such a high level after 5 years while spending over $4 trillion in QE and federal government stimulus.  Addressing each one will take many blogs to navigate through its maze.  However, one very popular progressive idea is to always raise minimum wage.  Unfortunately, the minimum wage laws already in place serve to the detriment of the group of people its proponents claim it helps, minorities and youth. Let us look at how both education and minimum wage affect unemployment.  

We have 50 million people on food stamps, approximately 8 million collecting disability, and a U6 of nearly 14% underemployed (although many non-partisan economists have this closer to 24%).  However, the way the government schemes and measures unemployment, the figure is around 7.3% UE. The most staggering statistic and the reason we have such an inequality gap among young Americans has mostly to do with the 18-34 age bracket unemployment figure. This age bracket comprises nearly 45% of all unemployed people.  Those 16-24 in age are the most impacted of this group.  The black teen unemployment is nearly 38% and for black men 20+ years its over 14%.  For white teens its just around 19% and over 20 years of age it’s approximately 6%. Overall teen unemployment is approximately 23% according to the Bureau of Labor Statistics. The media and those politicians on the left use these figures to highlight that America still wrestles with racism.  However, in reality these numbers have little to do with racism and instead much to do with education levels and socioeconomic issues that are pegged, rightly or wrongly, to  race. To highlight this point, Asian unemployment is near 5% and unemployment among women of both white & black are well below that of men in all categories.  So it has little to do with sexism or racism. But without labeling issues of unemployment as ‘racist’ or ‘sexist’ most politicians would be forced to actually deal in facts and not hyperbole and vitriolic tirades against anyone who is in denial of the benefits of minimum wage laws. So what are the drivers behind these figures that most politicians would rather you not be informed about? 

First off, education, the real Civil Rights issue of the day is of paramount concern about why this number is out of control in the black community.  72% of all black babies born are born to single moms and 67% of black children are in single-parent families.  Many of these moms are either on welfare or near the poverty line.  This fact alone almost guarantees inequality for life as many will be the victim of their own circumstance. But it used to not be that way in the black family unit.  But you will hear few of the black leaders today speak of why the black family has seen widespread destruction and you have almost never heard President Obama speak of this fact.  What, sadly, the avoidance of this fact helps cement is that education is nary a concern to the single mom who has little to no control of the child since the community raises the child, according to Melissa Harris-Perry of MSNBC .  And what happens when kids are mostly unsupervised with little to no parental supervision at home but rather where the schools and the community raise our children?  Bedlam and chaos!  Education is a mere afterthought to staying alive and gaining street cred.  Street cred is more desired by many of our black youth and the emulation of those ‘heroes’ that are invited over to the white house for grand balls.  

Jay-Z, a former crack dealer, is one of president Obama’s “friends” who has carte blanche access to the White House and has a tremendous biography of success in music, clothing and entrepreneurship.  However, when black youth are constantly listening to former street thugs, who are being honored at White House events and lavish campaign parties,as they promote violence, treating women like a doormat and glorify thug life, is it any wonder that black male graduation rates are less than 42% in almost all of our major cities?  In NYC, Detroit, Philadelphia, Cleveland and Rochester, graduation rates range from 28% to 9%.  Of all crime, 75% are committed by someone without a high school diploma. Simply increasing high school graduation rates would have a profound impact on crime as well as poverty.  But liberal democrats, who believed that if we horde all the minorities and poor into subsidized housing in inner city communities with the government providing the main sustenance to the people, then it would be seen as an upward mobility ladder.  In Chicago, Atlanta and other cities where high rise ‘ghettos’ were the fashion of the day in the 70’s & 80’s, most of these structures have been torn down and given way to capitalist development that have now become thriving communities.  Cabrini Green in Chicago is one example that I have been fortunate to see blossom.   

Minimum wage, a liberal Utopian concept, which actually discourages hiring of uneducated and less skilled workers contrary to what has been beaten into our skulls by the media and political class.  In fact, the Bacon-Davis Act passed in 1931 could possibly be one of the more anti-Black (racist, yes) pieces of legislation ever passed by Congress, and signed into law by the liberal icon, FDR.  The Act was primarily passed to prevent non-unionized black or immigrant laborers from competing head to head with unionized white workers. The effects of this law are still felt today as minorities tend to be under-represented in highly unionized skilled trades but rather over-represented as it relates to unskilled workers. Thomas Sowell and Walter Williams have written and spoken incessantly about this and proven quite factually about its harmful effects primarily targeting blacks, minorities and low skilled workers.  Also, many in the media/political class would have many of us believe that minimum wage jobs are used to raise a family and that there is nowhere to go once on a minimum wage job.  This myth has been so discredited but unfortunately the myth persists because of the victimhood mentality. So therefore, they lie and distort the facts while crying out that the minimum wage should be raised to a ‘livable wage’.  Whatever the hell that is.  A livable wage to me may be quite different to you. And as entitled as our society is today, that livable wage will change when the next crux of tech gadgets and smart cars enter the fray and politicians need to win votes and keep their voting bloc loyal to their party.  

Today’s poor, according to the IRS, have HVAC, a refrigerator, a color tv – usually two, cable, high speed internet service, and a cell phone. Anyone making over $100,000 can afford these things but yet our ‘poor’ have the same luxuries?  Having traveled to some of the more impoverished places in the world where a monthly wage is sometimes less than $50, I can tell you how the real “poor” live.  There is no reason in this world that a poor person should feel they are entitled to the same luxuries as someone making $100,000, other than the liberal belief in compassion and Utopia. So due to their compassionate, YOU pay for these luxuries for millions and millions of people. Many whom are not even trying to find a job.  A minimum wage job is meant to be a ‘starter’ job or a job that a second income earner takes to augment the households income or just to not be a bored stay at home wife/husband.
Without a good education many are left unemployed.  If youth are unemployed then statistics show they turn to crime.

I will close with this snippet of video with Milton Friedman addressing ‘Minimum Wage’ and highlight some of the commentary he presents herein: Let me give you a very simple example – take the minimum wage law. Its well-meaning sponsors – there are always in these cases two groups of sponsors – there are the well-meaning sponsors and there are the special interests, who are using the well-meaning sponsors as front men. You almost always when you have bad programs have an unholy coalition of the do-gooders on the one hand, and the special interest on the other. The minimum wage law is as clear a case as you could want.  The special interests are of course the trade unions – the monopolistic trade craft unions.  The do-gooders believe that by passing a law saying that nobody shall get less than $9 per hour (adjusted for today) or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure, that people whose skills, are not sufficient to justify that kind of a wage will be unemployed…The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills. That’s what the law says…Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.”

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One comment on “Education, Unemployment and Minimum Wage

  1. cpuvathingal
    September 24, 2013

    Very well written; and it makes sense. You may also want to add, as it supports your argument, that the unemployment rate, as it is currently calculated, is significantly less for those people with a college education (I believe less also with a high school education).

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