"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, September 18, 2013

A History Lesson from Thomas Sowell on the Minimum Wage

I have written many times here (and here and here) about the minimum wage and its pernicious effects on low-skilled workers and, particularly, on low-skilled minority workers.   Thomas Sowell, the eminent economist, gives a history lesson here about why this isn't a bug of minimum wage laws, it's actually a feature (albeit an evil feature):

Minimum-wage laws can even affect the level of racial discrimination. In an earlier era, when racial discrimination was both legally and socially accepted, minimum-wage laws were often used openly to price minorities out of the job market.
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 well-regarded 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.
Some supporters of the first federal minimum-wage law in the United States — the Davis-Bacon Act of 1931 — used exactly the same rationale, citing the fact that Southern construction companies, using non-union black workers, were able to come north and under-bid construction companies using unionized white labor.

Read the whole thing.

No comments:

Post a Comment