Walter Williams is a well-known syndicated columnist, prolific author, and professor of economics at George Mason University. His latest book, Race and Economics: How Much Can Be Blamed on Discrimination?, has already stirred up some controversy.
ConservativeHome's Ryan Streeter asked Dr. Williams a few questions about his new book:
RS: Thomas Sowell has called your new book "a demolition derby on paper" because of how you take on fallacies about race in America. One of the fairly shocking findings along these lines is that unemployment among African Americans was lower during periods of greater discrimination than today. Why is that?
Williams: A lot of my research has shown that the unemployment rate among black workers was much less many years ago than it is now. That is, it was lower when discrimination against blacks was higher. Now, I’m not saying that discrimination wasn’t an issue or problem. It was. The point, rather, is that it doesn’t explain all that a lot of people think it does.
A big factor that does explain why unemployment has risen in the black community was the institution of the minimum wage, followed by its subsequent expansion to cover just about every job out there. Not long after it was created, the minimum wage covered around 50% to 60% of all jobs. Now it covers most.
The effect of the law is to discriminate against low-skilled people. This hits teenagers especially hard. Black teens share the handicaps of teens in general in this regard, but they also have a disproportionate share of other challenges. The result is very high levels of unemployment among younger workers. The unemployment rate for blacks between the ages of 16-24 is 55%, and among whites it is about 27%.
RS: Talk a little more about how the minimum wage law discriminates against low-skilled workers.
Williams: The law has eliminated a number of good jobs. For example, when I was a young person, you go to the neighborhood theater, and you’d see teen ushers at work. You don’t see those jobs anymore because the minimum wage destroyed them. In the 1940s and 1950s, there was always a young person at a gas station to pump gas and wipe down your car’s windows. That job went away because of the minimum wage, not because motorists suddenly decided they enjoyed getting out of their cars and pumping gas themselves amidst the fumes.
RS: Are there other factors driving unemployment worth mentioning beyond the minimum wage?
Williams: Certainly. One would be unemployment compensation. The size of the subsidy and the duration that one receives it are contributing factors. A number of people will remain unemployed as long as they get the checks, and once the checks run out, they will go looking for a job. The problem is that the longer one is unemployed, the harder it gets to find a job later.
RS: Given our history of failed job training, what can policymakers do today, if anything, to help promote work and employment?
Williams: Policymakers simply need to acknowledge that job training programs, the CETA [Comprehensive Employment and Training Act] programs of the 1970s and the like, have produced disappointing results. The federal government ought, first, to get out of the business of destroying jobs through policies such as the minimum wage, and second, stop spending money on phony programs that don’t work. Just because academics and elites like these programs is no reason to keep them going.
Government creates problems at all levels. Consider this. What should it take for someone to get in the taxi business and earn, say, $45,000 per year? It’s not a huge investment: a car, insurance, knowledge of the city. But in most cities, you need to have a license to own and operate a taxi. You need the medallion in your car showing you’re a legitimate taxi provider. In May 2010 the getting such a medallion in New York City would have cost you $603,000. This kind of law discriminates against anyone without that kind of money – which is a lot of people. One thing’s for sure, you don’t see many taxis owned by blacks in New York.
In Washington, DC, by contrast, you can get the license for less than $200, and the result is that a lot of taxis are owned by blacks.
The point of all of these factors is this: there are a whole host of reasons that explain high unemployment in the black community. Discrimination does not explain as much as people think it does. Surely there was a lot more discrimination back in the 1940s and 1950s, and yet you can’t deny that unemployment among blacks was quite a bit lower back then.