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Harold Meyerson, Walter Williams, and Minimum-Wage Legislation

Here’s a letter to the Washington Post:

Harold Meyerson asserts that, “[a]lthough economic libertarians object to the minimum wage on theoretical grounds, a look at the states that have refused to enact minimum-pay statutes suggests the real opposition to the minimum wage is rooted in something else.  Those states are Alabama, Louisiana, Mississippi, South Carolina and Tennessee – places where persistent racism and the heritage of slavery seem to me a far more likely cause of opposition to the minimum wage than any ideological infatuation with the works of Ayn Rand” (“Wage boost could pay Democrats dividends,” Jan. 3).

To allege, as Mr. Meyerson does, that opposition to minimum wages is fueled by racists is akin to alleging that opposition to defense spending is fueled by the military-industrial complex.  It makes no economic sense and it’s historically inaccurate.  My colleague Walter Williams explains: “During South Africa’s apartheid era, its racist unions were the major supporters of minimum wages for blacks. South Africa’s Wage Board said, ‘The method would be to fix a minimum rate for an occupation or craft so high that no Native would likely be employed.’  In the U.S., in the aftermath of a strike by the Brotherhood of Locomotive Firemen, when the arbitration board decreed that blacks and whites were to be paid equal wages, the white unionists expressed their delight saying, ‘If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain.'”*

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

* Walter E. Williams, “Minimum Wage Cruelty,” April 14, 2010.

Also, of course, the chief opposition to minimum-wage legislation is rooted not in “the works of Ayn Rand” (or in any other formal political philosophy) but, rather, in mainstream economic theory.