LEFTIST “COMPASSION” AND MINIMUM WAGE LAWS

An Australian reader writes:

“Bill Bunbury's book "It's Not the Money, It's The Land" tells the story of the social devastation loosed on outback aboriginal communities by well meaning but badly thought out equal pay laws. The laws were enacted by a coalition of economically illiterate social reformers and trade union allies mainly interested in advancing the interests of their (predominantly white) members. Bunbury's book is the transcript of a trio of radio documentaries available in Real Audio on the web here. Bunbury tells the story of minimum wage driven despair and dispossession from a social and 'oral history' perspective.

For the big picture, Linda Gorman provides a devastating analysis of how minimum wage laws work in practice, not only in the Australian outback but everywhere. This is pretty well standard economic textbook stuff these days. US studies show minimum wage laws to be particularly damaging to the economic interests of minorities and teenagers.

(Of course, this is not the only time discriminatory practices were introduced disguised as 'labor reform' see this item on the anti-minority Davis-Bacon Act of 1931. Here in Australia, the first political party to advocate federally enforced equal pay legislation for women was the socially conservative, 'pro-family' DLP. Unlike economically illiterate feminists, the canny DLP hoped this legislation would reduce the job opportunities for women and thus slow the move from home to workplace they opposed. You can't fault their economic logic!)

Milton Friedman has called minimum wage legislation "the most anti-black law on the statute books". The Australian outback experience bears him out. (As Friedman says, there is only one true minimum wage, zero. Attempts to impose artificial minimums above that, increase the number of people earning the true minimum wage.) Of course there is no rush here to say "sorry" by the apology police. They are too busy condemning a previous generation of well meaning do gooders, the missionaries and welfare authorities who ran child protection and adoption programmes. These are often condemned outright today as racist "stolen children" schemes. It is arguable that the minimum wage laws actually did more long term damage to Aboriginal communities. Hopefully a future generation of Aboriginal activists will return the favour to the minimum wage meddlers.

(A historical aside... It was through thinking about the minimum wage that prominent philosopher Rober Nozick, switched from a social democrat to a libertarian. "Bob [Nozick] went back to his pals at 'Dissent' [socialist] magazine and confronted them. If the minimum wage is so good, why not set it at, say, $10 an hour? They had no answer to the question. That is, these lifelong professional socialists, well-known and widely published writers respected to this day, could not even proceed past the first stage of the argument. Nozick began to rethink things furiously." See here)”

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