On The Historically Racist Motivations Behind Minimum Wage

Senators are expected to vote tomorrow on a bill that would raise the minimum wage from $7.25 to $10.10, a well-intentioned though economically irrational policy change that few Democrats realize has a troubling racial history.

The nonpartisan Congressional Budget Office recently reported that artificially inflating wages to this extent would cut about half a million jobs in the short run (though CBO concedes the figure would be higher in the long-run beyond their mid-2016 projections). Economists note those workers most likely to be cut are lowest-skilled, young, minority workers, who, as Reihan Salam of Reuters writes, need these roles to learn “grit, self-regulation, motivation, and the ability to work constructively with others” as a means “to climb the economic ladder.”

The business-friendly National Center for Policy Analysis points out “the 1931 Davis-Bacon Act, requiring ‘prevailing’ 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.”

Now, even more of the poorly-educated, minimally skilled, and indifferent youth will find themselves “priced out” of the job market.

No employment, or at least any worthy of the name, is ever extended by the employer, unless the employer was getting more of value from the person who is employed, than the costs of the position in terms of wages, benefits and fixed costs of providing the tools, physical environment, and the support services that make that position possible. If the employer is not making a profit after paying all the costs of maintaining the position, the position is abolished, and/or the employer ceases operations.

“Making a profit” can be a tricky proposition. The only thing that a person sells in this world, is the time available to himself or herself, and the only thing that anybody buys is satisfaction. Somewhere between these two standards of what I like to call “personal capitalism”, there fits all the basic reasons why a person is even alive.

There are all some very basic requirements to remain alive, and these needs build on a hierarchy. This is further explained in various textbooks of human psychology, and those interested may delve into that at their leisure as it piques their interest.

All human beings share an intense desire to be loved, and if that means that in order to be loved, one must provide for the wants and needs of others, then a basis for commerce comes into existence. The individual trades what he or she may possess, for whatever someone else has either in excess, or does not any longer want or need.

But simply dictating to another what should be exchanged or the terms on which it must be exchanged, is no way to gain either the acceptance or the consummation of such dictated exchange. Managed or command economies will always, and sooner than later, end in failure.

Minimum Wage? $0.00 per hour. Anything more than that should be in the light of what benefit is provided to the person offering employment in exchange for the time and effort extended by the employee.

Regarding Minimum Wage:

“It is much better to enact a minimum-wage law even if it deprives these unfortunates of work… better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind.” - Royal Meeker, U.S. Commissioner of Labor, under Woodrow Wilson

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