Question

Between 1940 and 1970, four million blacks left the American South, doubling the Northern black workforce. Research shows that the mass migration had little effect on white male wages, but negatively affected black male wages. Assume before the migration that black men and white men earned the same wage. show on graph, how the migration affected the employment level for black men and the relative wage between white men and black men (wM/wB). Assume the North has some employers who discriminate and some who do not. lebel, axes and supply and demand curves, and clearly pre and post migration equilibria.

Answer 1

Since after migration, wM (wage rate for white men) did not change much but wB (wage rate for black men) decreased much, (wM/wB) increased after migration.

This can be explained using following graph of labor market for black men only. Wage rate for black men (wB) and employment of black men (L) are measured vertically and horizontally respectively. D0 & S0 are initial labor demand & labor supply curves, intersecting at point A within initial wage rate for black men wB0 and initial employment of black men L0. After migration, there is an increase in black workforce, increasing labor supply of black men, shifting their labor supply curve rightward to S1, which intersects D0 at point B with lower wage rate for black men wB1 and higher employment of black men L1. Since (wB1 < wB0), there is an increase in (wM/wB).