Minimum Wage is Racist

Were minimum wages ever intended to be a living wage?
Charles Tips
Charles Tips, Founding CEO of TranZact, Inc.
Updated Jan 29, 2017

Originally Answered: Does minimum wage imply a living wage?

No, it implies a lot of people not working, particularly minority youth. A full 90 percent of economists surveyed regarded minimum-wage laws as increasing the rate of unemployment among low-skilled workers.

This is not out of ignorance. The early history of minimum-wage laws is wholly racist, designed to create economic hardship for “undesirables.”

    A minimum-wage law was passed in British Columbia, Canada, in 1925 with the intent of pricing Japanese and Chinese immigrants out of working in the lumber industry.
    In South Africa’s apartheid era, white labor unions urged that a minimum-wage law be applied to all races in order to keep black workers from taking jobs away from white unionized workers by working for less than the union pay scale.
    The first federal minimum-wage law in the United States—the Davis–Bacon Act of 1931—cited the fact that Southern construction companies, using non-union black workers, were able to come north and underbid construction companies using unionized white labor.
    The state laws enacted by 15 states and the District of Columbia from 1912 to 1923 when the Supreme Court ruled in Adkins v. Children's Hospital that the minimum wage violated due process rights, were directly aimed at blacks, Asians, Jews and other Eastern European immigrants as they applied only to the wages of women and children. Part of the sentiment was that such immigrants should take on the values of the progressive Anglo-Saxon Protestant native stock and not use wives and children as economic assets. Others more bluntly wanted to make it difficult for immigrants to escape their ghettos.

So, how do progressives, the driving force behind minimum wage laws, perform the mental acrobatics necessary to flip from minimum wage being barrier to undesirable workers to being living wage for workers starting their careers?

In 1937 during the Roosevelt presidency, the Supreme Court reversed itself in West Coast Hotel Co. v. Parrish, and we shortly got our first federal minimum-wage law—the Fair Labor Standards Act—in 1938. We’d have all been vastly better off if that had not happened bringing the Lochner era of SCOTUS wariness of federal regulation of business to an end.

But, that’s a hardcore libertarian talking. Progressives at the brain-trust level reap benefits from minimum wage initiatives.

    Search “minimum wage” and just scan the raft of articles detailing how progressives fought the darkness to bring you the light of a decent wage and how the mean old conservatives still want your work to be paid at a less-than-fair rate. We have your back, young, not-so-bright person!
    Now every transaction is a four-way affair—you, your employer or worker, the state labor and tax bureaucracy and the federal labor and tax bureaucracy. Part of that is to make sure the government gets their cut. A more pernicious part is the knowledge that the process is the punishment, a chilling punishment at that. When mounds of paperwork stare you in the face or even the risk of breaking the law in hiring someone, less hiring takes place.
    Unions donate more money to Democrats to keep minimum-wage laws in place in order to make their own wage demands more competitive.

When Otto von Bismarck co-opted the Berlin Social Democrats (the old equivalent of our progressives), Karl Marx went ballistic and predicted that the new monarchistic hybrid of socialism would eventuate in a dictatorship of the bourgeoisie using state power to maintain a permanent underclass in order to keep their own elite status. I’m cynical enough to see that as exactly what’s going on with progressives. After all, in my days of student radicalism, I was arm-and-arm with guys, and some gals, who could recite their Gramsci and Fanon and Quotations from Chairman Mao.

But your lay progressive, your rank-and-file progressive doesn’t see it that way. They see it as the Democrats have their back rather than that they are a duped underclass. Here’s what they miss.

Have you ever seen a job you would gladly do for free?

Maybe it had high social status, or offered a real learning opportunity, maybe it was a sure door-opener, you got to hang with the cool kids, you got to have real challenge, you got valuable experience… Such jobs existed in abundance when I was a kid. By the time my sons were getting to their teen years, during the Clinton administration, those opportunities were long-gone. I helped find them on their behalf, but they and their friends didn’t even see the possibility; nobody these days wants to run afoul of wage or child-labor laws.

When they go for that minimum wage job, guess what, it has been redesigned to be worth the wage demanded—no more goof or learn-on-the-job forgiveness. No, the job will go to someone who can demonstrate the probability of being worth the pay rate right from the start. All work opportunities are reduced to their economic component, edging out all other considerations no matter how beneficial they might have been for you.

Me and my friends started working at age 12 if not earlier. Almost anyone would hire you if you asked for work, even make up a job on the spot for you. Delay young people from getting that variety and depth of work exposure young, have them start looking for their first “real job” in college or after… will you get a living wage? No, but between that and your student debt your chance of becoming part of an underclass to prop up someone else’s elite status just shot up. [Bold h/t Paul O'Brien, per his comment]