Tuesday, February 19, 2013

Minimum Wage Laws Racist in Origin

This may surprise. Minimum wage laws came into existence in the 1930s, and "supporters in Congress at the time were explicit about using them to stop blacks from displacing whites in the labor force by working for less money," writes Jason Riley at the Wall Street Journal.

Unfortunately, supporters got their wish:
Prior to the passage of minimum-wage laws—and in an era of open and rampant racial discrimination in the U.S.—the unemployment rate for black men was much lower than it is now and similar to that of whites in the same age group.

Today, unemployment stands at 7.9% overall but is 13.8% among blacks (versus 7% among whites), 14.5% among black men (versus 7.2% among white men) and 37.8% among black teens (versus 20.8% among white teens). Yet Mr. Obama has proposed increasing the minimum wage by 24% to $9 an hour to placate his union supporters who want less competition for their members. A higher minimum wage might lift earnings for existing workers—provided they keep their jobs—but it also reduces job opportunities for millions of people out of work.

Out of political expediency, Mr. Obama is putting the interests of Big Labor ahead of the urban poor. He's hardly the first politician to do so, and the reality is that Republican and Democratic presidents alike have raised the minimum wage. It's also true that Mr. Obama is president of the entire country, not just its black inhabitants. But is it too much to ask that he not support policies, however well-intentioned by current advocates, that were anti-black in origin and have a long history of depressing black employment?

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