Sunday, May 26, 2019

[uaexhwma] Racism in increasing minimum wage

An increase in the minimum wage will cause most people to earn the same or higher wage.  But it will also cause some people to be laid off: this is basic economics.  (In economic terminology, those people were "on the margin": their labor was worth the old minimum wage but not the new increased minimum wage.)  (Realistically, what more commonly happens is employees see their hours reduced, but we won't tackle that case here.)

Those few people made worse off will be disproportionately black.

Do you care?  Everyone's a little bit racist, sometimes.  Or evil.

Practically, this problem might be the lesser of evils compared to the greater evil of the social effects of large scale income inequality.  There are other methods of decreasing income inequality that don't suffer from this problem (e.g., lump sum government handout to everyone, financed by not-regressive income taxes), but such methods are probably politically more difficult to achieve than raising the minimum wage.

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