… is from page 40 of my late, great colleague Walter Williams’s remarkable 1982 book, The State Against Blacks:
The racial effect of the minimum wage laws exist in the absence of racial preferences on behalf of employers. The minimum wage law gives firms effective economic incentive to seek to hire only the most productive employees, which means that firms are less willing to hire and/or train the least productive employee, which includes teenagers, particularly minority teenagers. But assuming away any productivity differences between black and white workers, minimum wage laws give firms incentive to racially discriminate in hiring. The reason is that the minimum wage law lowers the private cost of discriminating against the racially less preferred person.
DBx: Yes. The economics on this matter could not be more clear.
Suppose that some politician, pundit, or professor were to go on TV or Twitter and say the following: “Government should shield bigoted employers from having to pay the cost of behaving like bigots. It can and ought to do so by enacting legislation that compels blacks and other minorities to subsidize bigoted employers’ discrimination against blacks and other minorities.”
Of course, any such politician, pundit, or professor would immediately, and rightly, lose all credibility as someone whose advice should be taken seriously. Indeed, such a person would be expelled from office or fired pronto and become a modern untouchable.
Yet let a politician, pundit, or professor propose that the minimum wage be increased, and that person is hailed as a Progressive saint. But why? The consequences of the minimum wage are precisely what the untouchable bigot proposes in the first example. The only difference is that the untouchable bigot intends both to encourage unjust discrimination by subsidizing it and to have the subsidy paid for by the victims of discrimination, while the minimum-wage advocate is likely unaware of this vile consequence of his or her proposal.
While intentions are not irrelevant in judging a person’s moral worth, the consequences of any person’s proposals and actions ultimately matter more. Given the long-time documentation of the negative effects of minimum wages, especially on the most vulnerable people, it’s inexcusable today that proponents of minimum-wage legislation remain ignorant of its harmful – discriminatingly harmful – consequences.