Skip to comments.A Defining Moment (Sowell on Romney & minimum wage)
Posted on 02/06/2012 10:56:14 AM PST by jazusamo
Governor Mitt Romney's statement about not worrying about the poor has been treated as a gaffe in much of the media, and those in the Republican establishment who have been rushing toward endorsing his coronation as the GOP's nominee for president with 90 percent of the delegates still not yet chosen have been trying to sweep his statement under the rug.
But Romney's statement about not worrying about the poor because they "have a very ample safety net" was followed by a statement that was not just a slip of the tongue, and should be a defining moment in telling us about this man's qualifications as a conservative and, more important, as a potential President of the United States.
Mitt Romney has come out in support of indexing the minimum wage law, to have it rise automatically to keep pace with inflation. To many people, that would seem like a small thing that can be left for economists or statisticians to deal with.
But to people who call themselves conservatives, and aspire to public office, there is no excuse for not being aware of what a major social disaster the minimum wage law has been for the young, the poor and especially for young and poor blacks.
It is not written in the stars that young black males must have astronomical rates of unemployment. It is written implicitly in the minimum wage laws.
We have gotten so used to seeing unemployment rates of 30 or 40 percent for black teenage males that it might come as a shock to many people to learn that the unemployment rate for sixteen- and seventeen-year-old black males was just under 10 percent back in 1948. Moreover, it was slightly lower than the unemployment rate for white males of the same age.
How could this be?
The economic reason is quite plain. The inflation of the 1940s had pushed money wages for even unskilled, entry-level labor above the level specified in the minimum wage law passed ten years earlier. In other words, there was in practical effect no national minimum wage law in the late 1940s.
My first full-time job, as a black teenage high-school dropout in 1946, was as a lowly messenger delivering telegrams. But my starting pay was more than 50 percent above the level specified in the Fair Labor Standards Act of 1938.
Liberals were of course appalled that the federal minimum wage law had lagged so far behind inflation and, in 1950, they began a series of escalations of the minimum wage level over the years.
It was in the wake of these escalations that black teenage unemployment rose to levels that were three or four times the level in 1948. Even in the most prosperous years of later times, the unemployment rate for black teenage males was some multiple of what it was even in the recession year of 1949. And now it was often double the unemployment rate for white males of the same ages.
This was not the first or the last time that liberals did something that made them feel good about themselves, while leaving havoc in their wake, especially among the poor whom they were supposedly helping.
For those for whom "racism" is the explanation of all racial differences, let me assure them, from personal experience, that there was not less racism in the 1940s.
For those who want to check out the statistics and I hope that would include Mitt Romney they can be found detailed on pages 42 to 45 of "Race and Economics" by Walter Williams.
Nor are such consequences of minimum wage laws peculiar to blacks or to the United States. In Western European countries whose social policies liberals consider more "advanced" than our own, including more generous minimum wage laws and other employer-mandated benefits, it has been common in even prosperous years for unemployment rates among young people to be 20 percent or higher.
The economic reason is not complicated. When you set minimum wage levels higher than many inexperienced young people are worth, they don't get hired. It is not rocket science.
Milton Friedman explained all this, half a century ago, in his popular little book for non-economists, "Capitalism and Freedom." So have many other people. If a presidential candidate who calls himself "conservative" has still not heard of these facts, that simply shows that you can call yourself anything you want to.
His words were true then, and he repeated the same message recently on Stossel.
I got a supermarket job in college that paid $1.35/hour. Now, since New York is a right-to-grovel state, I had to join the AFL-CIO which deducted $5/week from my meager paycheck in dues. I generally got about 20 hours a week, 3 hours and 42 minutes of which it took me to pay the union.
Allowing me to opt out of membership would have been equivalent to a 25¢/hour raise or about 19%.
Sowell's right to bring this up, though. If Romney's so damned worried about the middle class, he should think a bit about middle class kids and young adults who won't find a job because the minimum wage rises ahead of their ability to make money for their employer.
Hah! And my view is the exact opposite!
In all the ranting about “illegal immigrants” and the eeevil businesses who hire them (no doubt mostly small, small businesses), not 1 person ever mentions how the Minimum Wage has created this Under-the-Table haven for illegals.
If there are illegals who don’t want to be discovered, you can hire them and pay them under the table - at cheap rates. Legal people MUST be paid the higher rates; they will be discovered.
So, businesses that struggle likely love the idea of paying low-skill people for their simple jobs rather than the crippling rates that merely START at MW.
Thus, and vicious cycle - MW+ is too high for small business, they secretly pay secret illegal residents for easy work, more illegals keep coming in.
Maybe if we cut off this socialist nonsense, there wouldn’t be so many illegals!
I don’t care how good the “outcomes” you feel would result from a high minimum wage. The thought process that led you to that conclusion is uninformed. Just read some of Thomas Sowell’s books on economics or for that matter just the pages in Walter Williams book that Sowell mentioned. Government mandated ANYTHING is just plan wrong.
EXACTLY. The market will always find a way, even if it has to add a black market or move to a better location.
>> the Minimum Wage has created this Under-the-Table haven for illegals. <<
Really a great insight. Thanks. Don’t know if the idea is original to you, but it certainly deserves wider exposure!
Well thank you. It definitely occurred to me on my own, but I’m sure many people have thought of it. Apparently, though, only us little people, because it’s never mentioned even on local radio talk.
Eliminating the minimum wage would create an avalanche of new demand for low skill foreign labor.
Not a good plan.
Low skill immigrant citizens vote 80% for the Democratic Party.
Low skill workers - home grown or immigrant - receive more in government benefits than they pay in taxes.
High unemployment among home grown ethnic groups - like Blacks - would not change.
Black workers are not being turned down for low wage employment.
They fail to apply, or they are fired for poor attendance or tardiness (terminating Black workers for insubordination, poor performance, or failing a random test means an INSTANT lawsuit).
Reducing their wages would make the situation even worse.
“If a presidential candidate who calls himself “conservative” has still not heard of these facts, that simply shows that you can call yourself anything you want to.”
That must mean then that it’s OK for me to call Romney anything I want to also. Thanks for the ping jaz.
What about all the low-skill people here? I don’t know if you are talking code for “illegal” when you say “immigrant”. If it’s a real immigrant, I don’t care. If it’s illegal - I’d like to eliminate them.
I can see some problems because of all the other socialistic !$#@$!#@ that goes on. The only reason you bring up this negativity is exactly on the assumption the OTHER socialist things like free hand-outs continue.
We have built a humongous mountain of trouble with all the FDR and LBJ garbage.
If I mean illegal, I write illegal.
The USA grants citizenship to about 1 million new immigrants each year.
About 350,000 of those new citizens do not have a high school education.
America does not have a shortage of poorly educated low skill workers.
Legally importing 350,000 new ones makes no sense, especially since most of them vote for the Democratic Party.