11.
Racism
To whatever degree racism exists, the minimum wage law renders it
cost-free. Employers who wish to discriminate against a certain race
can do so with no financial repercussions! One of the virtues of a
free market price system is that it penalizes people for irrational
choices -- penalizes them in the form of a financial loss. Without a
legally mandated minimum price for their labor, a disfavored group
can underbid a favored group to acquire jobs. So in the example of
Blacks as the disfavored group, Black job seekers can sell their labor
services at a discount (say at $5.00 per hour) compared to the favored
White job seekers (say at $6.00 per hour). This has been very common
in American history. Prior to a minimum wage law, Blacks dominated
jobs in the railroad industry by offering their labor at a lower wage.
(One might say it is degrading for Black workers to earn less for the
same work, but if you could speak to any of these men you would find
they much preferred a
lower
wage to
no
wage!)
With a minimum wage law in force, a racist employer can hire Whites
only with no financial loss. Without a minimum wage law the racist
employer can indulge his racist preferences
only
at a serious competitive
disadvantage to any more open minded employer. Based on this theory
it is no mystery why the White racist labor unions in segregated South
Africa demanded equal pay for Blacks -- the effect was to
legally
throw
Blacks out of work, while appearing to be on their side!
|