The Minimum Wage and Race

Over at Cafe Hayek, Don Booudreaux posts an extended quote from David Henderson's book The Joy of Freedom dealing with the ulterior motives that were involved in raising the national minimum wage in the 50s and 60s:

“Forty years ago, the politicians who pushed for the increased minimum wage did not hide their motives. Nor, in an era of state-sanctioned segregation, did they feel the need to hide their knowledge of who the intended victims of minimum-wage legislation would be. In a 1957 Senate hearing, minimum-wage advocate Senator John F. Kennedy of Massachusetts, who just four years later would be President of the United States, stated,

Of course, having on the market a rather large source of cheap labor depresses wages outside of that group, too – the wages of the white worker who has to compete. And when an employer can substitute a colored worker at a lower wage – and there are, as you pointed out, these hundreds of thousands looking for decent work – it affects the whole wage structure of an area, doesn’t it?

“The witness he was addressing, Mr. Clarence Mitchell, then director of the Washington Bureau of the NAACP replied,

I certainly think that is why the Southern picture is as it is today on the wage matters, that there is a constant threat that if the white people don’t accept the low wages that are being paid to them, some Negroes will come in [to] work for a lower wage. Of course, you feel it then up in Connecticut and Massachusetts, because various enterprising people decide to take their plants out of your states and take them down to the areas of cheap labor.

(The quotations from Kennedy, Mitchell, and Javits are from U.S. Senate, Labor and Public Welfare Committee Proposals to Extend Coverage of Minimum Wage Protection, Hearings before the Subcommittee on Labor, 85th Congress, 1st session, March 20, 1957, p. 856)

One of the things which people often forget in discussing setting minimum wage levels is that when people are forbidden from using cost as a means of determining who to hire, they necessarily fall back on other reasons for choosing which in many cases may actually prove to be less savory: influence, preferment, race, etc.