George Stigler and many others point out that no law in economics is as certain as the Law of Demand: if the price rises, the quantity demanded falls. That applies to goods and labor too. In principles classes I would illustrate the law in several ways, including applying it to the effects of increasing the minimum wage. Much of the empirical work on minimum wages has been done by David Neumark. In December 2025 he posted a revision of his co-authored paper “Minimum Wages and Race Disparities.” Below is the paper 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 broader low-skill groups. We find evidence that job loss effects from higher minimum wages are more evident for blacks – and more so for black men. In contrast, they are not very detectable for whites. Moreover, the effects of minimum wages are often large enough to generate adverse effects on earnings (and relative earnings) of blacks. Given strong residential segregation by race in the United States, the race difference in the effects of minimum wages implies that the adverse impacts fall on areas with a high black population share. We also find evidence that minimum wage effects are more adverse in black areas, regardless of individual race, which accentuates the concentration of the adverse effects of minimum wages in areas where blacks are a very high share of the population.
Neumark’s co-authored paper is: