Support the Minimum Wage

By Jonas Buck

In a Feb. 23 column, “Eliminate the minimum wage,” Anish Krishnan admonished us to use “proper economic analysis, not emotional appeals, when it comes to public policy.” But economic reality suggests serious repercussions for eliminating the minimum wage. Assertions in favor of eliminating the minimum wage, an absurd proposition to those of us who have worked minimum wage jobs, revolve around matters of unemployment, discrimination and the distortion of the market. With or without the minimum wage, a healthy economy will maintain a natural rate of unemployment. But the minimum wage, implemented in 1938, hardly raises this rate. With a post-World War II low of 2.7 percent in 1952, and 3.9 percent before the 2001 recession, the minimum wage cannot be blamed for major unemployment. Krishnan cites Robert H. Meyer’s 1983 study that suggests paying black workers over “the market wage” – presumably below minimum wage – leads to the firing of black workers before whites and a 20 percent increase in unemployment for inner-city youth. The notion that blacks should be paid less than whites in order to keep their jobs harkens back to sharecropping. To compensate for such a large unemployment rate, wages would have to decrease drastically. If this constitutes “proper economic analysis,” it is clearly not fit for the world we live in. Fortunately, presidential candidate Newt Gingrich has a solution to black unemployment: liberate students of child labors laws and hire them to work as custodians to clean their own schools. This “on-the-job-training” would acclimate the students to working without even a minimum wage to protect them for the rest of their lives! In all seriousness, encouraging impoverished people to not even expect a minimum wage from an early age is very troubling. Educational subsidies exist to open up minds and future opportunities. Paid or for-credit internships can be part of an innovative educational curriculum, but should not prepare at-risk youth for menial labor. Black and Hispanic males are currently unemployed at a rate of 13.6 percent and 10.5 percent respectively, compared to 7.4 percent for white males. Paying those who do have jobs even less than the federal minimum wage ($7.25 an hour) would not solve these severe employment shortages and would provide the employed an even smaller economic share than they already have. Indeed, the absence of minimum wage protections between the Civil War and the New Deal allowed employers to use race to pit workers against each other, instead of permitting them to unite around their common economic interests. There is a well-documented history of the use of black strikebreakers who would work for less than (the euphemistically pejorative) “market level.” Gender should also be considered in discussion about the minimum wage. A 1999 report by the Economic Policy Institute showed that bottom level wage changes affect women more than men, because they form a disproportionate segment of low-wage workers. In 2011, women made 77 cents for every dollar men made. Since the wage decrease caused by the elimination of the minimum wage would disproportionately affect women, eliminating the minimum wage would backtrack much of the progress made since the 1960s when this disparity stood at 59 cents to the dollar. Although assertions that the minimum wage causes large-scale unemployment and discrimination are categorically false, it is valid to say that government policy has distorted the labor market. It has made it fairer. Child labor laws, the Equal Employment Opportunity Commission, and the minimum wage have all curbed some of the market’s imperfections. By doing so, they guarantee a measure of future opportunity and prosperity not otherwise provided to the most disadvantaged in our society and the working majority. All economic data in this article came from the Bureau of Labor Statistics. refresh –>