7-12-15 – Galbraith on Minimum Wage

by John McClaughry 

A recent Vermont Digger story reported Democratic gubernatorial candidate Peter Galbraith as saying  “When the minimum wage was put in in the 1930s, in the midst of the (Depression), it did not cause unemployment to rise, it didn’t drive away jobs, it didn’t double the price of anything, It put people back to work at livable wages. That’s why we have it.”

Well actually, that’s not why we have it. Economists like Thomas Sowell and Walter Williams, who are black, have explained in detail why the Federal minimum wage law was passed. It was passed to keep black workers from taking “white jobs”. “Unscrupulous” employers would hire two or three unskilled black men to do the work of a white worker, paying them peanuts. When the minimum wage law came in, the employer hired fewer white workers in their place. Did it cause unemployment to rise, in the Depression? Yes, among blacks, who the Progressives of that era scorned as inferior beings. Too bad for them!

Of course no politician – especially no Democrat –  really cares any more about the economics of the minimum wage, but for those who do, see Princeton economist Thomas Leonard’s new book, Illiberal Reformers, as well as Walter William’s older The State Against Blacks. Leonard in particular documents how the progressives of the Thirties wanted inferior species like blacks to disappear, and denying them work was a step in that direction. But try telling that to Hillary Clinton, Bernie Sanders, Matt Dunne, Peter Galbraith and Sue Minter .

Neither of the Republican candidates at Irasburg last month showed any support for minimum wage hawkery, and Phil Scott, a small businessman,  was particularly good in explaining what jacking up the minimum wage above productivity value does to business viability.

{ 1 comment… read it below or add one }

H. Brooke Paige July 12, 2016 at 8:02 pm

In fact a $15/ hour minimum wage would do make Vermonters, who rely on welfare, independent as the current portfolio of benefits is the equivalent of $21/hour. The increase would merely raise the level at which those folks fall off the cliff. At the same time, unless a mandated increase is subsidized by the government, it will lead to employers tightening their workforce by: laying off workers, reducing hours for employees and/or deferring new hiring. Further, the increase will substantially reduce employment opportunities for school age folks looking for after school and summer jobs – eliminating the chance for students to find first time jobs that provide valuable work experiences that pave the way for a lifetime of productivity!

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