Saturday, February 27, 2021

Biden's Chief Economist at the Department of Labor Appears to Have No Understanding as to What Causes High Black Unemployment

Joe Biden has appointed 36-year-old Janelle Jones as the Department of Labor’s chief economist.

Bloomberg reports:

For more than a decade in government and research organizations, Jones has focused on finding out why Black people were falling behind in the labor market. She coined the phrase “Black Women Best” to drive home the idea that if policies are crafted to help this historically disadvantaged group, they would help all workers. 

“When I see that it’ll take four to five years for the economy to return to full employment, what I’m thinking is that it’ll take Black workers 10 or 12 years,” Jones said. “My role here will be to think about those sorts of things, to give a lens to union workers, low-wage workers, different types of workers who aren’t usually centered.”

But her writing appears to chiefly focused on reporting on new data studies on the differences between black unemployment and white unemployment.

There are these, for example:

Again, these are all collections of data without any discussion of what causes high unemployment among blacks. There is never a mention, for example, of the high minimum wage as a factor which makes it difficult for black teenagers to get that all important first job.

Bizarrely, one of her few writings which go beyond data collection reports is an essay supporting increased minimum wages---which causes higher black unemployment!:

At the beginning of 2018, 18 states will increase their minimum wage, providing about $5 billion in additional wages to 4.5 million workers across the country. In a majority of these states, minimum wage increases (ranging from $0.35 in Michigan to $1.00 in Maine) are the result of legislation or ballot measures approved by voters in recent years. Eight of these states (Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota) will have smaller automatic increases that adjust the minimum wage to keep pace with price growth. This automatic inflation adjustment preserves the buying power of the minimum wage, which has steadily eroded over time.

And there you have it, Biden's pick for chief Labor economist, confused about the basics of how minimum wage laws cause damage.

As Thomas Sowell put it:

The minimum wage law is very cleverly misnamed. The real minimum wage is zero – and that is what many inexperienced and low-skilled people receive as a result of legislation that makes it illegal to pay them what they are currently worth to an employer.

Most economists have long recognized that minimum wage laws increase unemployment among the least skilled, least experienced, and minority workers. With a little experience, these workers are likely to be worth more. But they cannot move up the ladder if they can’t get on the ladder.

 For a full discussion of how the minimum wage hurts everyone, including those who receive the nominal pay wage, see:  Understanding the Numerous Problems With Minimum Wage Laws.


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