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The Black Teenage Unemployment Act



It’s entirely true that Art Laffer can stray into a little bit too much political rhetoric rather than just laying out hardcore economic reality. His sometimes claims that all tax cuts pay for themselves are not true, while his insistence upon the Laffer Curve itself, that dependent upon the initial tax rate it is sometimes true that a tax cut pays for itself, is true. The argument around that second is only what that rate is, not the existence of such a rate.

For the curve is a mathematical certainty. There have been 120% profit taxes, for example, and they didn’t raise much revenue. Largely because the Soviets instituted them as a method of closing down private sector businesses, the lack of revenue was the point. Zero percent profits taxes also raise nothing. Somewhere between the two is the sweet spot of maximum revenue collection. This is all just obvious. That all tax cuts pay for themselves is not true and only excusable on the grounds that someone is deploying a little too much political rhetoric – along the lines of Ms. Ocasio Cortez telling us that the Green New Deal won’t cost anything because so far it’s just pretty words.

After all, we don’t expect people to actually tell us the unvarnished truth when they’re doing politics now, do we?

However, this from Laffer isn’t rhetoric, it’s hard truth. The minimum wage law really is the Black Teenage Unemployment Act:

Or as Salon has a little more of it saying:

Art Laffer, a member of President Donald Trump’s coronavirus economic task force who last year was honored with a Presidential Medal of Freedom, once referred to the federal minimum wage law as the “Black Teenage Unemployment Act” on Fox News while he attempted to claim that it made “no sense whatsoever.”

“The minimum wage makes no sense whatsoever to me,” Laffer told host Jenna Lee on the since-canceled Fox News show “Happening Now.” “Honestly, it’s just the teenage — ‘Black Teenage Unemployment Act.’ And this is the very group that we need to have jobs — not be put out of work because of a minimum wage. So, I’m very much in favor of, at least for teenagers, getting rid of the minimum wage.”

Well, it’s true. Perhaps we’d prefer it wasn’t true, perhaps we’d like a different reality, but it is true.

Even if we try to insist that a minimum wage actually increases employment through stimulus to the economy as a whole – difficult but some do twist themselves far enough to so claim – it will still be black teenagers who carry the costs in terms of unemployment.

The insight is that a minimum will be most biding upon those at the bottom of the economic pile. Those most tenuously connected to the world of employment will be those most likely to lose jobs if the price of labour rises. Who are least connected? We’re none of us here about to claim that blacks a privileged in the American economy nor in their employment prospects. And teenagers, obviously enough, given their inexperience and lack of training are less connected than older people.

We do indeed see higher black unemployment rates, we do indeed see higher teen unemployment rates. This is just the world we’re in and those carrying the double load are those who get it in the neck if their wages are forced up by government fiat.

This really isn’t controversial either. It’s so obvious that British minimum wage law has a lower such minimum for those under 18 – the full rate only kicks in at age 25 actually.

Being entirely fair about all of this I’m not sure how closely I’d let Art Laffer get to the levers of economic power but this particular statement of his, that the minimum wage binds hardest upon black teens, is true. So too that the unemployment it creates is concentrated in that very segment of the population. Even if the overall effect – as above, if we wish to twist that way – is to increase employment it will still be at the cost of those black teens. For if the labour is all the same price then why wouldn’t you hire some arts graduate to make the frappucinos instead of some kid from the wrong side of the tracks? It’s only if the disadvantaged are able to make the offer of their own labour more attractive that they’ll get that first step on the ladder. Which is indeed why we should oppose such a minimum wage, as Art Laffer says.



in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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