Minimum Minority Hiring Laws

Thursday, September 19, 2013

I commented earlier in the week on a recent Thomas Sowell column that argued against the minimum wage. It turns out that Sowell has written a second column in the same vein, only this time from a more historical and political perspective. It was interesting to learn that, only a few decades ago, the effects of artificially high labor prices on the labor market were better understood by non-economists than they apparently are now.

The below culminates a short list of examples of minimum wage laws designed to keep ethnic minorities out of labor markets:

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.

These supporters of minimum wage laws understood long ago something that today's supporters of such laws seem not to have bothered to think through. People whose wages are raised by law do not necessarily benefit, because they are often less likely to be hired at the imposed minimum wage rate. [bold added]
Sowell is agruably being charitable in calling the above consequence "unintended", but give him credit for bringing the issue to the attention of at least one black politician, a member of the Black Congressional Caucus. (His conversation ended soon after the questions became a bit too pointed.)

-- CAV


Anonymous said...

In several other venues that I don't have to hand, Sowell points out that labor unions explicitly used the minimum wage to exclude blacks from starting in the workplace in order to preclude them ever competing for jobs at any level. I believe that the American union for Locomotive Firemen was one instance where the statement of the leadership made this tactic clear.

Another example were the white labor unions in South Africa who also used this tactic to exclude or hamper black participation in any legal labor markets. I'm fairly sure that neither of these examples fall under the description of unintended.

Townhall website was floating a minimum wage increase trial balloon and I commented on the historical use of minimum wage laws to exclude persecuted minorities. My comment did not clear the moderator.

Walter Williams has an excellent historical review of the use of gov't authority by public and private entities to exclude blacks from the labor market. I got a copy back in the early 80's.

It's titled, "The State Against Blacks" and used copies can be purchased on Amazon. Dr. Williams also has spoken with John Stossel on the topic on a couple of occasions, some of which are on youtube.

c. andrew

Gus Van Horn said...

Thanks for pointing to this additional information.