Minimum Wage: Useful Idiots
Back in the 1970’s there was a television commercial that has remained imprinted in my memory. It showed a Native American male who saw his country destroyed by polluted rivers, industrial waste and people carelessly dumping trash. After seeing the all the waste and refuse, tears started streaming from his eyes.
Four decades later, I shed tears for what I perceive as exploitation and mistreatment of the most vulnerable. It is like watching shepherds leading their lambs to the slaughterhouse. What additionally puzzles me is watching those who are out of work or have no job skills marching alongside labor unions for an increase in the minimum wage.
Vladimir Lenin called those who crusade for causes they do not fully understand “the Useful Simpletons”. Like Tea Party members who defend plutocrats, I don’t understand the logic of those that are having a hard time finding employment marching alongside labor unions. If you are having a tough time finding work at the minimum wage, why not make it much harder by asking for more money? I assume well-meaning progressives want to make the price of unskilled work more expensive by raising the minimum wage`.
Raising the minimum wage has been one of those feel-good theorems that been espoused by progressives for generations. Who can argue against giving poor people more money, we all want more money. However, history shows although the minimum wage helps those that have jobs on the downside it discriminates on the unskilled labor force such as teenagers and minorities who need valuable work experience.
Also history has shown both corporations and unions have used the minimum wage not to champion the little guy, but to drive out competitors or discriminate against immigrants minorities or cheap labor.
As recently as 2005, Wal-Mart former CEO Lee Scott was lobbying congress to raise the minimum wage. The former Ceo hit all the talking points on why it was important. Claiming “We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don’t have the money to buy basic necessities between pay checks.”
However many historians have documented how child labor, pensions benefits and health and safety regulations have became enacted . These regulations were not pushed by the public but by large companies that wanted to harm small business that can’t absorb the cost of higher wages and increased compensatory packages.
Also unions have used the minimum wage not to champion the little guy but as tactic to drive of cheap labor and immigrants . The precursor to first minimum wage bill under the Fair Labor Standards Act, 1938 was the Davis Bacon Act in 1931 which mandated that contractors pay the local prevailing wages on public works projects for laborers and mechanics.
The purpose of the bill wasn’t to correct the ills of inequality but was driven In 1927, by a Long Island congressman Robert L. Bacon , who was criticized by local unions for allowing an Alabama contractor to build a Veterans’ Bureau hospital in his district by using non union African American workers. The unions complained that contractors were exploiting the migrants by paying low wages. The congressman then sponsored a bill with former Labor Secretary James J. Davis and enacted The Davis–Bacon act which made it illegal to hire workers under the prevailing wage.
In 1938 the first minimum wage was enacted ensuring that unskilled workers would be more expensive to small businesses and good samaritan that want to hire unskilled labor at fair market value instead of government imposed regulations.
These examples concludes that raising the minimum wage has not been used for egalitarian purpose but as an instrument that corporations and unions use to drive out competition or discriminate against cheap labor.