The racist history of minimum wage laws
American economist Thomas Sowell gives a brief description of the history of minimum wage laws you can read it below:
“In 1925, a minimum-wage law was passed in the Canadian province of British Columbia, with the intent and effect of pricing Japanese immigrants out of jobs in the lumbering industry.
A Harvard professor of that era referred approvingly to Australia’s minimum wage law as a means to “protect the white Australian’s standard of living from the invidious competition of the colored races, particularly of the Chinese” who were willing to work for less.
In South Africa during the era of apartheid, white labor unions urged that a minimum-wage law be applied to all races, to keep black workers from taking jobs away from white unionized workers by working for less than the union pay scale.”
It’s important to know that the intent of minimum wage laws had nothing to do with raising the standard of living for the working poor. The creation of minimum wage laws was to protect racial groups from what they believed was foreign competition. One of the main reasons why I advise people to research capitalism on their own as opposed to just accepting someone else’s opinion of capitalism is so they can know for themselves why and how capitalism forces people of races and ethnicities to work together.
Minimum wage laws actually forced many employers to move out of America, many of you might ask why and how? The answer is quite simple if you were to ever start a small business, wanted to grow your small business and find yourself competing against a Wal-Mart as an example. Being that Wal-mart is paying a minimum wage and you as the small business owner is forced to pay a minimum wage, Wal-mart being bigger is able to buy larger bulks for less than you small business owner.
How long before Wal-mart forces your small business into bankruptcy? The tax laws also favor the larger Wal-mart, if you the small business owner wanted to stay in business wouldn’t it be wise for you to relocate your store to place where minimum wage laws are much lower? If your business was forced to stay in America wouldn’t it be smarter for you to buy a machine instead of paying a worker an ever increasing wage?
Prior to the creation of minimum wages, low skilled workers had more options, if their boss didn’t pay them enough they’d change jobs, most employees worked a job and learned a skill with larger vision in mind, many low skilled workers had multiple jobs. It was in an employers best interest to pay his/her employees a liveable wage, the best part actually of no minimum wages was that many employees after learning a skill would move into business for self.
Actually if you pay close attention to tight knit communities that are reliant on hiring family members to run their businesses, thus not having to pay their family members a minimum wage, those groups tend to do the best economically. Those ethnic groups are also usually the largest targets of hate. Those groups tend to start with one business and turn that 1 business into multiple businesses. That was the original intent of capitalism. However government stepped in and changed everything. Most of the people that push for minimum wage laws are not racists, many of the people wanting to increase minimum wages are actually well intentioned, it would just be nice if they understood where the concept of minimum wages came from and what they’re used for.