The Minimum Wage Is Racist.
I write that both because It’s true, and because I’d like the left to abandon it, and because the left seems to treat anything that’s called racist like political kryptonite, there’s a chance that this might cause some of them to rethink their position… A very small chance. Fine, they won’t but I’m still going to write it out.
CRT, as we’ve previously noted, basically asserts that because laws were written by racists at a more racist time in history, that even laws that seem facially race neutral might carry racism between the margins, and so we should dig into those laws, see the disparities, and try to mitigate against them. I believe that I can make a compelling argument that the minimum wage laws in America were devised with a racist intent, and I believe that I can prove that the minimum wage results in racially disparate outcomes in 2021. Therefore, by the logic of CRT, the minimum wage should be abolished.
The Intent of The Minimum Wage Was Racist.
The minimum wage in America was brought in by Democrats. And while current Democrats might point to that as evidence of legal purity, this also happened during the Roosevelt administration in the 30’s, before the last political realignment that happened in the 60’s. And while Roosevelt was at the time supported by black Americans, it also pays to remember that his administration was the one that carried out the Japanese internment, and signed the National Housing Act of 1934.
Most importantly, they signed it cognizant of how previous minimum wages had effected economies: Minimum Wages were in part designed to price minority labor out of the market.
Said Thomas Sowell, when American was kicking the tires on an increase from $7.25 to $10.10:
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.
And Said Bill The Butcher in “Gangs of New York”:
I don't see no Americans. I see trespassers, Irish harps. Do a job for a nickel what a nigger does for a dime and a white man used to get a quarter for. What have they done? Name one thing they've contributed.
The idea is that if you increase the lowest amount you can pay a person, employers will enact higher standards, and those standards tend to disenfranchise poorer, uneducated and/or minority job applicants. This is a favored tactic of unions: Union labor is relatively expensive, but (in theory) higher quality, so employers might want to use non-union labor to do less critical tasks where quality isn’t necessarily important. But if the union can manage to increase the minimum wage closer to what they’re already making, then it becomes less appealing for employers to pull in non-union work. And union work is done by people disproportionately upper-middle-class, educated and white, who do you think they’re disenfranchising?
The Outcome of Minimum Wage is Racist
And we can see this in real time: While America’s national minimum wage hasn’t moved in decades, statewide, minimum wage increases happen on a regular basis, with many minimum wage increased being tied to inflation. And in places where the Minimum Wage increased, we saw business closures, layoffs and automation. And where we saw closures, layoffs and automation, the people who are cut are still disproportionately poor, uneducated, and/or are a minority.
In 2017, a couple of Harvard students conducted research that resulted in a paper that showed that for every dollar of minimum wage increase, there was a 14% chance of a 3.5 star restaurant closing. Caitlyn Dewey went on to say that this wasn’t necessarily a bad thing, because those restaurants tended to offer poor service or be poorly managed, and it would allow cream to rise to the top…. Which is an interesting argument, because regardless of why exactly businesses are stressed, black owned businesses are the ones that tend to fail.
Tie That Together
These fact patterns seem to more clearly and cleanly lend themselves to the types of situations that CRT was explicitly meant to cover; Laws written by racist people, with racist intent, that have deeply disparate outcomes in a current setting.
But I won’t hold my breath on progressives taking up that mantle.
Any Other Thoughts?
There’s also a discussion on whether outside the paradigm of race, the minimum wage is a good thing. I’m specifically going to talk about the reason why it kills jobs.
Progressive narratives are full of inconsistencies. A great example would be the conflicting narratives of “All Cops Are Bad” and “Only Cops Should Carry Guns”. This inconsistency is undergoing a forced reconciliation (and I think “All Cops Are Bad” is winning). The inconsistency surrounding the minimum wage is “We want to create Jobs” and “Raise the Minimum Wage”.
Notice how in the graphic at the top of this post that even progressive enclaves like New York and California, while having a higher minimum wage than most of the rest of America, still haven’t managed to get to $15? There’s a reason for that, and it’s not anti-racism.
Progressives will say things like “Increases to the minimum wage don’t hurt job numbers, because those jobs still need to be done” and will point to increases in job numbers in markets with minimum wage increases as proof that jobs can be made alongside minimum wage increases. Some go so far as to say that jobs increase because of minimum wage increases.
That is silly. It is basically uncontroversial to say that if you increase the price of something, it is unlikely that people will buy more of it. Labor is no different. If you have a company that is looking to hire 20 people, but after a minimum wage increase, they only hire 18, then the net loss of jobs due to the minimum wage is 2, even though jobs grew anyway. It’s possible that the company still hires the 20 people, particularly if their wage scale was already over the minimum wage (and that’s likely; It’s important to remember that very few people earn the minimum wage, only approximately 2% of people over the age of 24. And the people), but there is no reasonable argument that the minimum wage increase would case them to hire 22. Their best argument is that the wage increase doesn’t effect hiring at all, and the best way to make that argument is to keep minimum wage increases small, because that argument obviously doesn’t scale up very well.
If, as an example, the minimum wage was $50, McDonald’s would attempt to automate their entire business. This would be expensive, and would require technology that might not even exist yet, but there is no way that on a long enough timeline, they would pay people $50/hour to flip burgers. Again, it is beyond obvious that there is a level in which the minimum wage negatively effects job growth.
And if they did that…. What do you think the makeup of the laid off employees would be? Disproportionately poor. Disproportionately uneducated. Disproportionately minority.
The Minimum Wage is Racist.