Minimum Wages and Race Disparities

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 broader low-skill groups. We find no evidence that higher minimum wages reduce wage disparities. First, much of our evidence points to job loss effects from higher minimum wages are more evident for blacks – and more so for black men – but not detectable for whites. Second, in many of our analyses the effects of minimum wages are large enough to generate adverse effects on earnings (and relative earnings) of blacks. Third, given strong residential segregation by race in the United States, more adverse effects of minimum wages on blacks would fall on areas with a high black population share, and this appears to be accentuated by evidence that minimum wage effects are more adverse in areas where blacks are a very high share of the population, regardless of individual race.