What if I told you that the minimum wage laws were created to keep black people from being employed? What if I told you that the minimum wage laws have a net negative effect on the work force? What if I told you that no one “deserves” an amount of money per hour, but that you’re labor is what the market dictates?
(Forbes) The business-friendly National Center for Policy Analysis points out “the 1931 Davis-Bacon Act, requiring ‘prevailing’ (minimum) wages on federally assisted construction projects, was supported by the idea that it would keep contractors from using ‘cheap colored labor’ to underbid contractors using white labor.”
African-American economist Thomas Sowell with Stanford University’s Hoover Institution gives an uncomfortable historical primer behind minimum wage laws:
“In 1925, a minimum-wage law was passed in the Canadian province of British Columbia, with the intent and effect of pricing Japanese immigrants out of jobs in the lumbering industry.
A Harvard professor of that era referred approvingly to Australia’s minimum wage law as a means to “protect the white Australian’s standard of living from the invidious competition of the colored races, particularly of the Chinese” who were willing to work for less.
In South Africa during the era of apartheid, white labor unions urged that a minimum-wage law be applied to all races, to keep black workers from taking jobs away from white unionized workers by working for less than the union pay scale.”
In today’s South Africa, The New York Timesreported on poor workers, many of them black, angry at government leaders enforcing labor laws the price them out of a job.
While our African-American President Barack Obama tries to make a minimum wage hike a moral imperative, Sowell reports no sympathy from the Congressional Black Caucus after his entreaties that currying reciprocal political favors on other matters is not “worth sacrificing whole generations of young blacks to huge rates of unemployment.” Rather than inflating wages that punish employers, a better policy solution (which Obama even included in his own budget this year) is the earned income tax credit, which puts more money in workers’ pockets and saves their jobs.
Despite Democratic bluster on this issue, they’re not the ones with the facts to match. Or as Walter Williams, an African-American, libertarian economics professor at George Mason University, puts it: “The intentions are irrelevant to the effects.”
(American Thinker) It is clear that the minimum wage law is racist in its effect. Nobel Prize winning economist Milton Friedman and his wife Rose were among the first to point this out in their 1979 book Free to Choose. After reviewing the history of the minimum wage law in the United States, they wrote:
“After minimum wage rates were raised sharply, the unemployment rate shot up for both white and black teenagers. Even more significantly, an unemployment gap opened between the rates for white and black teenagers…. We regard the minimum wage rate as one of the most, if not the most, antiblack laws on the statute books. The government first provides schools in which many young people, disproportionately black, are educated so poorly that they do not have the skills that would enable them to get good wages. It then penalizes them a second time by preventing them from offering to work for low wages as a means of inducing employers to give them on-the-job training. All in the name of helping the poor. (pp. 227-228)”
The minimum wage is simply an instance of a price control, a mistake that foolish governments sometimes make. A maximum price tends to produce a shortage, while a minimum price tends to produce a surplus. The minimum wage creates a surplus of unemployed labor because it limits the demand for labor.
The minimum wage is producing 34.5% unemployment rates for black teenagers. Raising the minimum wage, as President Obama has proposed, would make it even harder for black teenagers to get their first job. Instead, the minimum wage should be lowered or eliminated.
At the very least, the government should exempt those seeking their first job from the minimum wage so that they can, at least once, get their feet on the bottom rung of the ladder to success.