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The Wages of Domestic Protectionism

Posted By Don Boudreaux On May 7, 2011 @ 8:48 am In History,Regulation | Comments Disabled

Here’s a letter to the Wall Street Journal:

The National Labor Relations Board is trying to stop Boeing from moving the production of some of its jetliners from Washington state to South Carolina where less-burdensome labor-union privileges will allow Boeing to produce at lower cost (Letters, May 7 [1]).  One unintended by-product of Boeing’s move, of course, would be greater competition for workers in the south and, hence, rising wages there.

Uncle Sam’s willingness to deploy brute force to prevent the movement of industries to the lower-cost American south isn’t new.  The most notorious instance of this nasty habit occurred in 1938 when, to strip away the cost advantage enjoyed by their rivals in lower-wage Georgia and the Carolinas, owners of textile mills in New England successfully lobbied Congress and FDR to enact America’s first national minimum-wage statute [2].

Then as now, Uncle Sam – despite all his blah, blah, blah about ‘justice’ and being on the side of ‘working families’ – kept the wages of higher-paid Americans artificially high by keeping the wages of lower-paid Americans artificially low.

Sincerely,
Donald J. Boudreaux

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URLs in this post:

[1] Letters, May 7: http://online.wsj.com/public/page/letters.html?hat_input=Mirensky

[2] owners of textile mills in New England successfully lobbied Congress and FDR to enact America’s first national minimum-wage statute: http://www.mackinac.org/article.aspx?ID=356

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