The following is an article published at www.lewrockwell.com, yesterday. Many
free market economists have documented the racist origns of minimum wage laws
and that they arose from labor unions in this country. I can assure
everyone that there was outright racism in craft unions, having seen it first
hand in New York City when I worked in IBEW, Local Union #3.
They began as the great migration of blacks began to the north in the 1920s, as
the sharecropping system began to break up. Unskilled labor competes in the
market place by selling itself at a lower price. The unions didn't like that
and pressured for these laws.
I challenge for responses.
Minimum Wage Cruelty
By Walter Williams
Which allows an American Samoan worker to have a higher standard of living:
being employed at $3.26 per hour or unemployed at a wage scheduled to annually
increase by 50 cents until it reaches federally mandated wages at $7.25? You
say, "Williams, that's a stupid question. Who would support people being
unemployed at $7.25 an hour over being employed at $3.26 an hour?" That's
precisely the outcome of Congress' 2007 increases in the minimum wage. Chicken
of the Sea International moved its operation from Samoa to a highly automated
cannery plant in Lyon, Georgia. That resulted in roughly 2,000 jobs lost in
Samoa and a gain of 200 jobs in Georgia.
Given Samoa's low cost of living, $3.26 provided Samoan workers a higher
standard of living than some of their neighbors on other islands. Now these
workers are unemployed. What's worse is that Starkist, Chicken of the Sea's
competitor, might leave the island as well. If that happens, increases in the
minimum wage will have cost more than 8,000 jobs in Samoa's canneries and
related industries; that's nearly half of its labor force. Samoan standard of
living will be further reduced by the increased cost of goods it imports. Ships
delivering goods from the U.S. and elsewhere to Samoa will not have as much
cargo on their return trips, making shipping a costlier proposition.
Cannery jobs flourished in Samoa because of its location and it was one of the
few American territories exempted from the minimum wage. Even the proposed 2007
increases in the minimum wage exempted Samoa. Since Del Monte, Starkist's
parent company, is headquartered in Speaker Pelosi's San Francisco district and
Chicken of the Sea is based in Southern California, Republicans had a field day
suggesting that Pelosi's calling for Samoa to be exempted from the increases in
the minimum wage reflected political payoffs and a conflict of interest. I
thought that as well, as suggested in my May 9, 2007 column, but exempting
American Samoa from minimum wage increases would have been the most
compassionate act, short of minimum wage repeal.
The unemployment effect of minimum wages isn't restricted to American Samoa but
to the mainland U.S. as well. Overall teenage unemployment stands at a record
25 percent while adult unemployment hovers around 10 percent. Also at a record
high is the 50 percent unemployment rate among black teenage males. One might
ask why teen unemployment, particularly that among black teens, is so much
higher than adult unemployment. The answer is simple. One effect of a minimum
wage law is that of discrimination against the employment of less-preferred
workers. Within the category of less-preferred workers are those with low
skills. Teens are disproportionately represented among such workers and are
therefore more adversely affected by minimum wages. Black teens are
disproportionately represented among teens with low skills and therefore share
a greater burden of minimum wages.
One of the more insidious effects of minimum wages is that it lowers the cost
of racial discrimination; in fact, minimum wage laws are one of the most
effective tools in the arsenals of racists everywhere, as demonstrated by just
a couple of examples. During South Africa's apartheid era, its racist unions
were the major supporters of minimum wages for blacks. South Africa's Wage
Board said, "The method would be to fix a minimum rate for an occupation or
craft so high that no Native would likely be employed." In the U.S., in the
aftermath of a strike by the Brotherhood of Locomotive Firemen, when the
arbitration board decreed that blacks and whites were to be paid equal wages,
the white unionists expressed their delight saying, "If this course of action
is followed by the company and the incentive for employing the Negro thus
removed, the strike will not have been in vain."
Tragically, minimum wages have the unquestioned support of good-hearted,
well-meaning people with little understanding who become the useful idiots of
charlatans, quacks and racists.
Every weekday JewishWorldReview.com publishes what many in the media and
Washington consider "must-reading". Sign up for the daily JWR update. It's
free. Just click here.
Walter Williams Archives
Roderick T. Beaman,D.O.
Board Certified Family Physician
Politicians and government officials are like diapers.
They should be changed often and for the same reasons.
