Skip to comments.Minimum wage has racist origin
Posted on 02/12/2014 5:44:31 AM PST by SJackson
Lets work through an example. Suppose 100 yards of fence could be built using one of two techniques. You could hire three low-skilled workers for $15 each, or you could hire one high-skilled worker for $40. Either way, you get the same 100 yards of fence built. If you sought maximum profits, which production technique would you employ? Im guessing that youd hire one high-skilled worker and pay him $40 rather than hire three low-skilled workers for $15 each. Your labor costs would be $40 rather than $45.
Suppose the high-skilled worker came into your office and demanded $55 a day. What would be your response? Youd probably tell him to go play in the traffic and hire the three low-skilled workers. After all, hiring the three low-skilled workers for $45, to get the same 100 yards of fence, would be cheaper than the $55 a day now demanded by the high-skilled worker.
The high-skilled worker is not stupid and knows thats exactly what youd do. He will do a bit of organizing first, convincing decent, caring people that low-skilled workers are being exploited and not earning a living wage and that Congress should enact a minimum wage in the fencing industry of at least $20. After Congress enacts a minimum wage of $20, what then happens to the chances of a high-skilled workers successfully demanding $55 a day? They go up because hes used the coercive powers of Congress to price his competition out of the market. Because of the minimum wage, it would cost you $60 to use the three low-skilled workers.
The minimum wage not only discriminates against low-skilled workers but also is one of the most effective tools of racists everywhere. Our nations first minimum wage came in the form of the Davis-Bacon Act of 1931.
During the legislative debate over the Davis-Bacon Act, which sets minimum wages on federally financed or assisted construction projects, racist intents were obvious. Rep. John Cochran, D-Mo., supported the bill, saying he had received numerous complaints in recent months about Southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South.
Rep. Miles Allgood, D-Ala., complained: That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country. Rep. William Upshaw, D-Ga., spoke of the superabundance or large aggregation of Negro labor. American Federation of Labor President William Green said, Colored labor is being sought to demoralize wage rates. The Davis-Bacon Act, still on the books today, virtually eliminated blacks from federally financed construction projects when it was passed.
During South Africas apartheid era, the secretary of its avowedly racist Building Workers Union, Gert Beetge, said, There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans. The South African Nursing Council condemned low wages received by black nurses as unfair. Some nurses said they wouldnt accept wage increases until the wages of black nurses were raised. The South African Economic and Wage Commission of 1925 reported that while definite exclusion of the Natives from the more remunerative fields of employment by law has not been urged upon us, the same result would follow a certain use of the powers of the Wage Board under the Wage Act of 1925, or of other wage-fixing legislation. The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed.
Whether support for minimum wages is motivated by good or by evil, its effect is to cut off the bottom rungs of the economic ladder for the most disadvantaged worker and lower the cost of discrimination.
Actually, not paying minimum wages isn’t racist.
Not giving them a job at all because of their color is racism.
...and how is that second encouraged?
See opening paragraphs.
The point is that economics, business - capitalism isn’t driven by race or ethnicity.
My point is wage determination isn’t a race thing. A race thing would be not giving them a job at any wage.
Sure...but minimum wage isn’t capitalism, it’s a created inefficiency for an effect. Banning employment for low skilled workers is an attempt to remove the natural starting rung. When you know that a particular racial group is prominent on that rung and you use that exclusion as a basis for removing that rung...
Look, you’re way too deep in this discussion. My remark was what it was and not worth discussing much beyond that.
Stop thinking about wages, capitalism and all that and think about the title of the article. Racism supposedly originated it, I think differently and provided a real example of racism.
The preferred approach today would be to seek a federal grant to build the fence for “free”. Using govt contractors who would be paid Obama’s new minimum wage, of course.
The OP assumes that the low-skilled workers are as qualified as the higher-skilled workers at building fence line. Chances are however, the low skilled workers are going to have to build that fence 3 or 4 times before they get it right whereas the ‘’higher-skilled’’ worker is going to do the job right the first time, making him cheaper to use, even at a higher wage.
The only weakness in the opening argument is the assumption that it would take three low-skilled workers to do the job. What if two could do it, for $30 total? How do we know it takes three?
Otherwise, I understand the point.