Drug Legalization and the Labor Market

Via Ta-Nehisi Coates, John McWhorter is very enthusiastic about the ability of drug legalization to improve the state of black America. I think there’s a lot to be said for laxer drug laws, but this strikes me as too optimistic:

If there were no way to sell drugs on the street at a markup, then young black men who drift into this route would instead have to get legal work. They would. Those insisting that they would not have about as much faith in human persistence and ingenuity as those who thought women past their five-year welfare cap would wind up freezing on sidewalk grates.

There would be a new black community in which all able-bodied men had legal work even in less well-off communities–i.e. what even poor black America was like before the ’70s; this is no fantasy. Those who say that this could only happen with low-skill factory jobs available a bus ride away from all black neighborhoods would be, again, wrong. That explanation for black poverty is full of holes. Too many people of all colors of modest education manage to get by without taking a time machine to the 1940s, and after the War on Drugs black men would be no exception.

I think the analogy to “welfare reform” is apt. Welfare reform seemed to be working great in the 1997-2000 period. Then it seemed to be working not as well in the 2001-2007 period. Then in the 2008-2010 period it seems to be working terribly. That’s because labor market conditions shifted. If black men currently earning black market drug incomes lost that opportunity, it’s true that some of them would find jobs in the legitimate workforce. But unemployment would still be really high, working class unemployment would still be really high, African-American unemployment would still be really high, and working class African-American unemployment would still be really really high. It’s just not within people’s power to conjure up intense demand for labor from low-skill individuals with spotty history’s in the legitimate workforce. If a guy walks through your door and says “I’m 25, I didn’t finish high school, and I’ve never held a legitimate job” you’d have to be a bit nuts to offer him a minimum wage job when there are so many other jobless people out there you could try to hire.

Very few of the years between 1980 and 2010 have featured “full employment” macroeconomic conditions. If you look at any particular set of people facing a bad labor market situation, there are going to be some good reasons why those people rather than some other people are the ones getting the short end of the stick. But it’s dangerous to take your eyes off big picture conditions.