| Abstract: | Public policies intended to raise the wages of unskilled workers, equalize educational opportunity, stabilize employment,
and increase imports were sources of the growth of unskilled and, therefore, of black unemployment since 1950. The wartime
wage-equalization policy and postwar minimum-wage policies raised the cost of unskilled labor relative to that of capital
and of skilled labor. The Fed's inflationary full-employment policy between 1950 and 1970 reduced real interest rates relative
to unskilled wages. Subsidies for higher education increased the supply of skilled labor, reducing its cost relative to that
of unskilled labor. Trade liberalization increased imports of manufactured goods from developing countries, which displaced
U.S. unskilled labor. |
