The Immorality of Minimum Wage

In my opinion, minimum wage is among the most immoral actions a government can take.  In general, I dislike price controls, but minimum wage takes the cake.

I’ve talked a little bit about minimum wage from the terms of force.  Now I want to talk about minimum wage as a form of population control.

The early 1900’s was a bad time for minorities, women, and people with metal disabilities.  The Progressive Party ran on a platform of eugenics, forced sterilization, and other methods to “fix” humanity.  Unfortunately, under pseudo-scientific mumbo-jumbo, they gained much prominence in American society, and 30 states passed eugenics laws that forced the sterilization of some 60,000 mentally disables or ill, or socially disadvantaged groups.

But there were far more subtle, more insidious ways the eugenicists tried to keep down the population, one of which was minimum wage.  Allow me to quote from noted British socialist Sidney Webb:

Legal Minimum Wage positively increases the productivity of the nation’s industry, by ensuring that the surplus of unemployed workmen shall be exclusively the least efficient workmen; or, to put it in another way, by ensuring that all the situations shall be filled by the most efficient operatives who are available.

What would be the result of a Legal Minimum Wage on the employer’s persistent desire to use boy labor, girl labor, married women’s labor, the labor of old men, of the feeble-minded, of the decrepit and broken-down invalids and all the other alternatives to the engagement of competent male adult workers at a full Standard Rate? … To put it shortly, all such labor is parasitic on other classes of the community, and is at present employed in this way only because it is parasitic.

The unemployable, to put it bluntly, do not and cannot under any circumstances earn their keep. What we have to do with them is to see that as few as possible of them are produced.

Americans picked up on this argument, too.  Royal Meeker, Woodrow Wilson’s Commissioner of Labor:

It is much better to enact a minimum-wage law even if it deprives these unfortunates of work.  Better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind.

In Congress, during the Great Depression, several Progressive politicians argued for minimum wage on eugenics/racist grounds, including Congressman William Upshaw (Georgia):

You will not think that a southern man is more than human if he smiles over the fact of your reaction to that real problem you are confronted with in any community with a superabundance or large aggregation of negro labor.

Rep. John Cochran (D-MO):

I have received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South.

And Rep. Miles Allgood (D-AL) spoke against “cheap colored labor” that “is in competition with white labor throughout the country.”

Minimum wage was originally employed as a method to keep “undesirables” out of the workforce.  This argument is still used in a modern context.  Despite their flaws, these people understood a simple economic rule: if you make something more expensive, you get less of it.  That hasn’t changed in the 100 years since these arguments were first made.  The only difference now is politicians (and some bad economists) now try to sell it as something good as opposed to something unquestionably evil.

HT: Don Boudreaux and Jeffery Tucker