The Racist History of Minimum Wage
The Progressive era lasted from the 1890s to 1930s. During this time, Progressives sought to use the powers of the government to fulfill social goals. Among these goals was a eugenics plot that was designed to keep the nation’s gene pool healthy.
Historian Thomas C Leonard notes that Progressives justified their eugenic claims with race science. Statistician Frederick Hoffman’s, Race Traits of the American Negro, claimed black hereditary inferiority would make them extinct. Richmond Mayo-Smith, a Columbian economist, believed blacks lacked the intelligence needed for full equality.
It is important to note that blacks were forced by widespread racism to take lower wages. This undercutting of workers angered Progressives. Charles Henderson, University of Chicago sociologist, said the unemployable
“bid low against competent and self-supporting men who are trying to maintain or raise their standard of living; and they can do this just this because they are irresponsible and partly parasitic.”
Groups who were not male or Anglo-Saxon were not deserving of a living wage and a higher standard of living. As John Graham Brooks, the first president of the National Consumers League, said standards of living were a “question of race.”
In order to justify stripping these groups of economic freedom, Progressives had to explain the reasons they would take lower wages. The argument that Blacks and Chinese immigrants accepted lower wages because of a lack of intelligence was a common one.
Another more widespread argument was made by linking race to Americanism. The Chinese diet and living practices were used to justify their inferiority. According to Woodrow Wilson, their yellow skin and eating habits made them “un-American.”
By linking race to ideals of Americanism, Progressives were able to justify excluding them from the economy. They did this through labor and wage regulations.
George Mason University professor, Walter Williams, is the man responsible for opening my eyes to the disastrous effects of minimum wage. In his book, Race and Economics, he discusses the racist history of minimum wage and other forms of labor regulation.
Prior to the adoption of these laws, African Americans had higher levels of employment than their white counterparts. According to the Department of Commerce, in 1910 71% of blacks over age nine were employed compared to 51% for whites. In 1900, the employment to population ratio for non-whites was 57.4 compared to 45.5 for whites.
During a time of rampant racial prejudice and subjugation, how could these statistics be true? The market punishes bad actors, and in this case racist pay- literally. In 1908, historian and journalist, Ray Stannard Baker remarked:
“One of the most significant things I saw in the south- and I saw it everywhere- was the way in which the white people were torn between their feeling of racial prejudice and their downright economic needs.”
In the early 20th Century unions barred black laborers from membership. Professor Williams writes “In six Southern cities, blacks represented more than 80 percent of the unskilled labor force… [and] 17 percent of the [skilled] carpenters.” The practice of bringing low skilled black laborers from the south to the north for construction projects was very common. In testimony on the Davis-Bacon Act, Rep. Clayton Allgood stated
“Reference has been made to a contractor from Alabama who went to New York with bootleg labor.. he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.”
The David-Bacon Act of 1931 required contractors to pay the local prevailing wage on public works projects. The prevailing wage is determined by the Department of Labor and not the market. For example, a carpenter in New York would get $34 to $40, compared to the market wage of $24. This made it costly for non-union shops to secure contracts. Ralph C. Tomas, executive director of the National Association of Minority Contractors said the act forced contractors to hire skilled workers who were predominantly white.
For evidence of the eugenics movement hostility to free markets let’s look at a 1916 editorial in The New Republic:
“Imbecility breeds imbecility as certainly as white hens breed white chickens; and under laissez-faire imbecility is given full chance to breed, and does so in fact at a rate far superior to that of able stocks.”
Did progressives know that minimum wage would cause some to be unemployed? Citing Henry Rogers Seager, the answer is yes. In a 1912 article called The Theory of the Minimum Wage he says:
“The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.”
Even if blacks receive training and gain skills equal to whites, they will remain unemployable. How does keeping blacks unemployed push the eugenics agenda? In 1912, Sidney Webb gave us this answer when he wrote:
“The unemployable, to put it bluntly, do not and cannot under any circumstances earn their keep. What we have to do with them is to see that as few as possible of them are produced.”
Documenting the use minimum wage by eugenicists, Thomas C. Leonard wrote in 2005 that progressives:
“believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it performed the eugenic service ridding the labor force of the ‘unemployable’.”
He went on to say
A minimum wage was seen to operate eugenically through two channels: by deterring prospective immigrants and also by removing from employment the “unemployable,” who, thus identified, could be, for example, segregated in rural communities or sterilized. …
In his Principles of Economics, Frank Taussig [proposed] “We have not reached the stage,” Taussig allowed, “where we can proceed to chloroform them once and for all; but at least they can be segregated, shut up in refuges and asylums, and prevented from propagating their kind.”
For these progressives, race determined the standard of living, and the standard of living determined the wage. Thus were immigration restriction and labor legislation, especially minimum wages, justified for their eugenic effects.
In some cases, minimum wage has been used to raise the pay of black workers, only to cause more harm. As a program in the anti-poverty measures passed by Lyndon B Johnson, a minimum wage was set at one dollar an hour. In the Mississippi Delta, black farm workers were accustomed to making $3.50 a day. The law put an estimated 25,000 workers out of a job because planters realized that chemical weed killers were about 12 times cheaper.
The history of minimum wage is marked by rampant racism and race science. This tool in the Eugenicist toolbox was used to make blacks unemployable. By many accounts, it succeeded. Minimum wage stripped blacks of the only tool they had to overcome rampant discrimination. Next we will discuss the empirical evidence on minimum wage effects.
