Topic: Do Minimum Wages Reduce Job Opportunities for Blacks?

Speaker: Professor David Neumark, University of California, Irvine

Host: Professor Xiao Wei from RIEM

Time: March 28, 2025 (Friday) 13:30-15:30

Location: Conference Room 1211, Gezhi Building, Liulin Campus, SWUFE

Organizer: RIEM 

Speaker's Profile

David Neumark is a Distinguished Professor of Economics at the University of California, Irvine, and Co-Director of the Center for Population, Inequality, and Policy. He has held positions at the Federal Reserve Board, the University of Pennsylvania, Michigan State University, and the Public Policy Institute of California, where he currently serves as an adjunct fellow. He is a Research Associate at the NBER, IZA, and CESifo, and a Visiting Scholar at the Federal Reserve Bank of San Francisco. He has made significant contributions to many areas of labor economics that intersect with major public policy issues. His research on labor market discrimination has pioneered new methods for measuring discrimination, and he was one of the original contributors to the "New Minimum Wage Research," helping to establish the use of state-level minimum wage variation to estimate minimum wage effects. In the field of urban and regional economics, he has produced extensive research on regional economic policy evaluation and has authored review articles for the Handbook of Regional and Urban Economics.

Abstract

We provide a comprehensive analysis of the effects of minimum wages on blacks, and on the relative impacts on blacks vs. whites. We study not only teenagers – the focus of much of the minimum wage-employment literature – but also other low-skill groups. We focus primarily on employment, which has been the prime concern with the minimum wage research literature. We find evidence that job loss effects from higher minimum wages are much more evident for blacks, and in contrast not very detectable for whites, and are often large enough to generate adverse effects on earnings.

We supplement this work with additional analysis that distinguishes between effects of an individual’s race and the race composition of where they live. The extensive residential segregation by race in the United States raises the question of whether the more adverse effects of minimum wages on blacks are attributable to more adverse effects on black individuals, or more adverse effects on neighborhoods with large black populations. We find relatively little evidence of heterogeneity in effects across areas defined by the share black among residents. But the large disemployment effects for blacks coupled with strong residential segregation imply that those adverse effects of minimum wages are concentrated in areas with high concentrations of blacks.