As Governor of Oregon, I will seek to abolish the State’s Minimum Wage Law.
The Minimum Wage Law has often been put forward as some kind of humanitarian, good intent effort, but what it is is a prohibition making it illegal for you to work for wages below a certain level. Somehow it seems strange to me to say you’re helping someone by passing a law that says”You will have no income, because I say so in the name of humanitarianism”, despite the fact that the person who was disemployed was evidently quite willing to work for that amount below the minimum wage, or he wouldn’t have agreed to it. It is a strange morality that gives the poor man and the hobo no income whatsoever instead of some income. Indeed, he has been denied the choice whether to work at that amount below the minimum wage, so that his Liberty has been severely curtailed. He is forced to sit on the beach, when he really wants to be working to get the dollars that buy him the commodities that make his life bearable, but the “humanitarian” comes in and says “It is forbidden.” Such humanitarians are usually not homeless.
But obviously, from the standpoint of Natural Rights Law, this is an abridgment of the unalienable Right to Contract, a crime against the Individual. That is all the moral reason necessary to repeal these laws.
However, there is a more sinister aspect to the minimum wage laws, and that is the racist aspect. According to Professor Murray Rothbard, before the Federal minimum wage laws were enacted, the unemployment rate for both Black and White teenagers was 8%. When the minimum wage was raised to 40 cents from 30 cents, the rates shot up for Black teenagers to 14% and for White teenagers to 11%. With the coming of the Korean War, with millions drafted into the armed forces, the rates fell back to 8%, but when the war ended, and the minimum wage was raised to 75 cents, the rates now shot up to 14% for White, and 24% for Black teenagers. When the rate was to be raised from $1.20 to $1. 65, Professor Milton Friedman testified before Congress that such a rise would mean 33% unemployment for Black teens. But the raise was passed anyway, and within 6 months to a year, the rate soared to 35% for Black teens, and has never come down. The differential between White and Black teen unemployment had always been zero before minimum wage laws; afterwards it has always been much higher for Blacks than for Whites. So this racist effect is clearly the work of the “humanitarian” minimum wage laws.
The fact that White teenage unemployment also rose after enactment, shows that not only is the minimum wage law racially discriminatory, but also discriminatory against youths in general.
The beneficiaries of this hell visited on Black youths, and youths in general, are overpaid trade union workers, who have successfully disemployed the more marginally-skilled workers, thus reducing labor competition, and in turn boosting the level of their wages. They ruin the lives of Youth in the name of doing good, but they know very well what they do.
It’s also often overlooked that a raise in the minimum wage has the effect of excluding many small startup companies, who may have gotten off the ground and perhaps succeeded with the old minimum wage, but who suddenly are confronted with new costs when the wage is raised, and find their business venture now unfeasible. This lessening of competition means less choice for the consumer and higher prices, something the large conglomerates love.
Thus the consumer is doubly robbed, first by paying more for goods due to the artificially higher wages received by the trade unions, and then in higher costs due to lack of competition from startup companies priced out by the higher minimum wage. The quality business that could have been but never was is a social cost of the minimum wage law that the Left never mentions, or even thinks about. But the Consumer suffers from that “never was”.
Moreover, one problem that is never mentioned is how the minimum wage laws rob the young of any experience in handling money and dealing with the economic problem, which is usually the main problem in most American’s lives. The child who could work in his uncle’s or neighbor’s business a few hours a week, or doing gardening or babysitting in the neighborhood, could learn something about earning and spending his own money. This economic experience is invaluable in this society, but minimum wage laws, if observed, rob modern children of this experience. The minimum wage, as it is raised, forces young people to get jobs in the one sector that can afford to pay it easily, the giant corporate sector. Working for one of these financial behemoths, the young person is forced to conform, to act like a robot, and to violate his moral code or get thrown out immediately. Is this the initial work experience we want to throw at young people, turning them into obeying robots? Between government schools and corporate jobs, it is no wonder we have such a passive country.
Ridding ourselves of the minimum wage will give teens a chance to work all kinds of different jobs, at different wage rates. Even the teen who is economically exploited may learn something, and resolve to never let himself be exploited again.
Additionally, in a country that is always verbally praising the free-market system and our freedom, in which there are no “maximum prices” on essentials like food, clothing, and shelter, why is it that in this one area of labor, we are willing to accept a government restriction that could mean the difference between hunger, starvation, and avoiding these miseries for a destitute person? Why in this one area in the Free-Market restricted, when no other area necessary to life is?
If we really believed in Capitalism, we would abolish this overthrow of the Natural Law Right to Contract, an unalienable Right of Mankind.
Libertarians can vote for me by checking the box on the Libertarian Primary ballot. Democrats, Republicans, and Communists can write me in.
Paul Grad, paulgrad4governor.wordpress.com