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Some History of Minimum-Wage Legislation in America

Posted By Don Boudreaux On November 26, 2012 @ 9:54 am In Crony Capitalism,History,Politics,Work | Comments Disabled

In this post yesterday [1] I mentioned that David Henderson, in his splendid 2002 volume, The Joy of Freedom [2], gave some history of the national minimum-wage in the U.S. – some history involving Sen. John F. Kennedy.

I’m now at my office and have laid my hands on my copy of David’s book.  Below is a long quotation (itself containing quotations) from pages 112-114 (footnotes excluded; brackets original to Henderson):

“In the late 1960s, Otis Elevator pushed for an increase in the minimum wage in New York state because it had begun to specialize in converting human-operated elevators to automatic elevators and wanted an increase in demand for its services.

“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.

“Kennedy’s colleague Jacob Javits, then a U.S. Senator from New York, was similarly blunt.  He said,

I point out to Senators from industrial states like my own that a minimum wage increase would also give industry in our states some measure of protection, as we have too long suffered from the unfair competition based on substandard wages and other labor conditions in effect in certain areas of the country – primarily in the South.

“Although probably no northern senator today would dare admit it, many who vote for increases in the minimum wage understand that one consequence will be to destroy jobs for the least skilled workers, a disproportionate number of whom are black.”

(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; and from Congressional Record, Feb. 23, 1966, p. 2692.)

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[1] this post yesterday: http://cafehayek.com/2012/11/minimum-wage-reality.html

[2] The Joy of Freedom: http://www.amazon.com/Joy-Freedom-Economists-Odyssey/dp/0130621129/ref=la_B001IZ1HAS_1_3?ie=UTF8&qid=1353851273&sr=1-3

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