It’s time for something radically different.
In the past year we’ve had violent protests and riots that have been set off by the civil unrest between Blacks and the police. Many people have rightly recognized that the riotous behavior is only a symptom of larger issues within the Black community. The issues most often cited are related to poor education, broken families and a lack of economic opportunities. I want to propose an idea to address the last of these maladies. However, I think we first need a brief history lesson.
1930 is a historically significant year in the discussion about the current economic struggles for Blacks. 1930 was the last time the unemployment rate for Whites was higher than it was for Blacks. This is unheard of these days because the Black unemployment rate has been almost double that of Whites for many years. In 2012 it was 6.3% for Whites and 14% for Blacks. When it comes to the unemployment rate for Black teens, the very group that tends to resort to violence to express their frustration, the unemployment rate topped 44% in 2011.
So what happened after 1930 that might explain this decline? Some have argued that the Davis-Beacon Act of 1931 and the Fair Labor Standards Act of 1938 bear some of the blame. These laws in effect discriminated against non-union labor and set the hourly wage for federally funded construction jobs artificially high. Given that Blacks were often excluded from unions in those days, this had the effect of protecting the wages and employment of Whites to the detriment of Blacks. Generations of Black men lost the chance to compete for lucrative construction jobs because unions colluded with politicians to exclude them. Although Blacks aren’t barred from joining unions today, unemployment rates for Blacks have not improved.
The takeaway point from this trip down memory lane is that racism and the setting of wages artificially high have been devastating to employment prospects for Blacks. When Blacks could essentially outbid Whites for jobs, as was the case before the 1930s, employers were willing to hire them more often than not, despite the blatant racism of that time. Once minimum wage laws were passed, Blacks lost their competitive advantage. So even though we’ve made progress against the blatant racism of the past, the fact remains that minimum wage laws, while well intentioned, have had a negative impact on the Black community, as evidenced by their higher than average unemployment rate for the past 50 years.
My general idea is as follows: in order to improve economic opportunities in Black communities, we must get young Blacks into the work force by giving employers an incentive to overcome whatever barriers they have that make them less likely to hire young Black men.
For example, if we allowed employers to pay at-risk Blacks between the ages of 16-19 less than the minimum wage, I’d bet that the unemployment rate for that group would quickly decline. The difference between what the employer pays and the actual minimum wage could be made up through government subsidies. As an alternative, we could give employers tax incentives for hiring more Blacks in that same group.
Regardless of how we structure the incentives, targeted efforts to reach that key demographic is crucial to preventing more instances like what’s been happening in Baltimore. The unfortunate reality is that the likely outcome for young Black men is a combination of criminal behavior and a lifetime of welfare dependence. I don’t like that reality and I absolutely disagree that this group is predisposed to such outcomes, but that’s how it is. It very well could have been my outcome. However, the confidence, self-respect and work experience that I gained when I started working at McDonald’s at age 16 are with me to this day and played a large part in why it wasn’t my outcome.
At this point I must apologize for the provocative title of this blog post. I doubt that my idea in its present form is a no-brainer. I can think of a few objections right off the bat. First, it seems that we’re rewarding racism because we’re giving incentives to those that, for some reason, wouldn’t otherwise hire young Black men. Second, such a policy would likely have the effect of displacing other groups from the work force. Third, any sort of preferential treatment of young Blacks seems unsettling to our notion that reward should be based on merit. All of these objections are legitimate and I think they can all be addressed. The point of this post is that we need to treat the root cause of the issues in the Black community by discussing new ideas, instead of continuously reapplying policies that have failed. As I wrote after the Mike Brown incident, unless we do something different, we’ll continue to see these tragic episodes.