IREGBULEM: Without the wage

Black youth unemployment sits at almost 40 percent. Overall black unemployment is around 14 percent. This is the case we face today, even though black unemployment in the 1930s and ’40s was actually lower than white unemployment. Isn’t it generally assumed that the economic situation of blacks has improved since then? What happened?

The minimum wage happened. When a person’s skills or productivity do not have value to an employer in excess of the minimum wage, that person will not get hired. So, when a young black teenager drops out of our ailing education system — which happens a lot by the way — he often cannot find a job, even though he is clearly an able-bodied, capable individual. When asked, slightly more than 90 percent of economists agree that minimum wage laws create unemployment. And yet the minimum wage law enjoys more than 80 percent support among the general American public. Black politicians are some of the most ardent supporters of the minimum wage. Where is the disconnect?

Many respond to the idea of getting rid of the minimum wage by claiming it protects workers from exploitation by employers.

First, I simply do not agree with the claim that workers would be “exploited” without the minimum wage. If an employer were to pay a worker less without the law, it would not be obvious to me how that constitutes exploitation of the employee.

If the firm lowers the person’s wage and that person keeps working, then clearly that person still finds it beneficial to work. No one forces them to, and therefore, there is no exploitation. One could perhaps make the argument that they are no longer being paid a “fair” wage for the work they are doing, but what does that mean? What is “fair”? Who are you or I, a third party, to say what is “fair” or not in a private, voluntary transaction? If I negotiate with someone to sell my home, and the eventual sale is lower than my initial asking price, does that mean I was “exploited”? Hardly.

Second, if one wants to talk about exploitation, perhaps we should look at how high school students across the nation are essentially forced to accept unpaid internships because companies cannot legally pay anything below minimum wage. And what about the many teenagers and young adults who cannot even afford to do unpaid internships since, after living expenses, they often become financially unsustainable?

What about the local New Haven high school students, who can’t get a job without any experience, and who can’t get experience without first having a job? They don’t have that parent or family friend who can give them a job just to be nice. Only 2 percent of workers above the age of 24 actually earn the minimum wage, but on the other hand, half of all minimum wage workers are under 24. It’s our youth who are being harmed. The minimum wage delays and inhibits entry into the labor force, where young people can begin to develop skills and build a resume attractive to future employers or educational institutions.

President Obama stated in his first debate that he wanted to “strengthen the ladder into the middle class.” But he and other supporters of the minimum wage have taken the ladder that normally sits at ground level — where anyone with any modicum of education or skill can grab on and start climbing — and pulled it up. It now hovers where only some of us are tall enough to reach the lowest rung, leaving the rest to suffer.

And many of our black youth simply do not currently have the skills to warrant being paid at least the minimum wage. With a lower or nonexistent minimum wage, we could get them climbing the ladder to the middle class sooner, rather than allowing them to wallow in the ghetto of the high-spirited, but low-skilled.

Nnamdi Iregbulem is a senior in Davenport College. Contact him at nnamdi.iregbulem@yale.edu .

Comments

  • yalemarxist

    >If the firm lowers the person’s wage and that person keeps working, then clearly that person still finds it beneficial to work. No one forces them to, and therefore, there is no exploitation.

    No one forces them to work, yet they are still forced to work; we cannot blame any individual bourgeois employer, but we can blame the bourgeois system. All men must eat, so all men must work; it is preposterous to think that they have any bargaining power, any leverage to quit a job in response to lower wages – when it is their stomach that holds them hostage.
    It is preposterous to think that freedom and autonomy are equivalent, that exploitation only occurs when a person’s autonomous decision-making has been violated.

  • grumpyalum

    “If the firm lowers the person’s wage and that person keeps working, then clearly that person still finds it beneficial to work. No one forces them to, and therefore, there is no exploitation.”

    If I have to hack off my limbs to pay off my creditor, clearly, there is no exploitation because I chose to go into the deal?

    Seriously. Talk about Full Randian.

    More importantly, what abolishing the minimum wage would effectively do is redistribute poor people’s income to other poor people. For most lower wage employers, wages are defined as X + raises/market conditions, where the X is defined as the minimum wage. Dropping the minimum wage will simply mean everybody at the bottom makes less money.

    In fact, for many fast food restaurants and service sector jobs, the idea that cutting the wage costs in half would lead to double the workers is silly. There is a point of diminishing returns and while you might get slightly more jobs, you’d ultimately hurt everybody.

    And for once, Yale Marxist isn’t completely trolling. Your stomach does hold you hostage and given that governmental support for the able-bodied but unemployed is pathetic, I imagine this isn’t going to help anyone.

    How about an alternative theory? Have the government employ all those able bodied young black and hispanic men into reconstructing our country, whose infrastructure has basically gotten zero updating since the rise of the Reagan coalition?

    Edit: Also, abolish unpaid internships unless they lead to guaranteed full-time employment if one meets expectations during the internship opportunity. It’s a terrible system that leads to mass scale exploitation of young labor for a false promise. It also recreates the class gap that college is trying to hopefully fix.

  • poliscidude

    Redistributing income among the poor? That’s some crazy shit right there.

  • River_Tam

    *Applause*

  • River_Tam

    And here is Thomas Sowell taking Mitt Romney to task over minimum wage laws:

    http://townhall.com/columnists/thomassowell/2012/02/07/a_defining_moment

    > It is not written in the stars that young black males must have astronomical rates of unemployment. It is written implicitly in the minimum wage laws.

    > We have gotten so used to seeing unemployment rates of 30 or 40 percent for black teenage males that it might come as a shock to many people to learn that the unemployment rate for sixteen- and seventeen-year-old black males was just under 10 percent back in 1948. Moreover, it was slightly lower than the unemployment rate for white males of the same age.

    > How could this be?

    > The economic reason is quite plain. The inflation of the 1940s had pushed money wages for even unskilled, entry-level labor above the level specified in the minimum wage law passed ten years earlier. In other words, there was in practical effect no national minimum wage law in the late 1940s.

    > Liberals were of course appalled that the federal minimum wage law had lagged so far behind inflation — and, in 1950, they began a series of escalations of the minimum wage level over the years.

    > It was in the wake of these escalations that black teenage unemployment rose to levels that were three or four times the level in 1948. Even in the most prosperous years of later times, the unemployment rate for black teenage males was some multiple of what it was even in the recession year of 1949. And now it was often double the unemployment rate for white males of the same ages.

  • Russell

    This article smacks of both incredible ignorance and callous disregard for anybody actually in a situation where they would be looking for a job at or (hypothetically) below minimum wage.

    To begin with, the claim that workers are not exploited because they agree to work is laughable. Wake up! Do you really believe sweatshop workers are not exploited? That child labor is perfectly legitimate? That it is completely okay for employers to expose their workers to dangerous workplace conditions simply because the workers continue to work?

    You are at Yale. You are probably never in your entire life going to worry about where the next meal comes from, or having a roof over your head. You will never need to worry about your employer exploiting you, and you will never, in all likelihood, work for anything close to the minimum wage. And you presume to talk about what’s best for people who are in this situation? Pardon me if I react negatively to such arrogance and ignorance.

    Moreover, even Adam Smith recognizes that there is a massive problem in the marketplace when it comes to employers artificially depressing the price of labor. And even Adam Smith knows that market failures need regulatory corrections. You don’t even accept Smith: instead, you’ve drunk the Ayn Rand kool-aid to the last drop. It may taste delicious to you, but while you’re enjoying your punch-drunk Randian high, thousands of people who work ten, twelve, fourteen hour-a-day jobs who do work much harder than anything you have ever done in your entire life, or anything you ever will do, are starving to death, unable to provide for themselves or their families working in the global marketplace. It makes me somewhat sick that anybody could possibly attempt to justify this, but you seem pretty committed to doing just that.

    • LtwLimulus90

      You’re being a bit presumptuous about where this person comes from and how hard he works.

  • Russell

    Moreover, let’s look at what would happen if the minimum wage were lowered or eliminated. To begin with, you’re absolutely right that unemployment would fall. But at what cost? People’s incomes would decline. Sure, the price of goods would fall a little in response to the reduced cost of labor, but you’ve made no argument to the effect that the prices of goods would fall sufficiently far to allow these new hires to maintain a decent standard of living. Moreover, even workers making the minimum wage right now are doing very poorly. When companies cut wages, there are two options: let people fall into squalid living conditions, or have some agent pick up the slack. If you endorse the first, then you’re a terrible person, but the argument ends there, and I can’t convince you otherwise. If, on the other hand, you actually have an iota of compassion, then you’ll agree that these people need to be helped. The typical market fanatic readily answers back, “Charity! Private charity will make up for it!” The funny thing is, they never present any evidence. But looking at historical periods without a minimum wage and without a government-provided social safety net, we see that private charity is woefully inadequate to the staggering poverty produced by the market- evidence against the free market retort. So it is necessary, then, to have a social safety net. Now, I would hazard a guess that the brilliant writer of this piece would, given the opportunity, substantially cut the social safety net.

    What remains, then, is either a contradiction, or an admission that we should be completely unfeeling to those who end up on the bottom end of the capitalist food chain. Those people, historically speaking, have made up the majority of the populace.

    (Actually, there is a third alternative, which is arguably the most plausible: the writer doesn’t know, or doesn’t care about, the facts.)

    A final word: the paradigm which argues for full employment as the ideal state of affairs is a deeply flawed one. Having a job, doing work, is not good in and of itself: it is good only insofar as it helps you live a decent life. Don’t make jobs the end of your philosophy. Rather, [concern yourself with whether or not people are happy][1].

    [1]: http://www.zpub.com/notes/idle.html

    • LtwLimulus90

      Your arguments are good, but your tone at some points is angry and cruel, your language vitriolic and patronizing, your attitude vindictive. Is that necessary?

  • RexMottram08

    Minimum wage laws are benefits that accrue to the employed to the detriment of the unemployed.

    Remove minimum wage laws and watch unemployment plummet among the youth, minorities, seniors, and the under-educated.

    Obama’s jobs problem is a function of low productivity (low return on invested capital due to high taxes) and sclerotic labor markets frozen by regulation.

    In short, if you support minimum wage laws, you are racist.