February 7, 2012

Sowell on Romney and the Minimum Wage

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 7:55 am

To Thomas Sowell, the gentleman who is perhaps the premier true intellectual in the land, Mitt Romney’s idea to index the minimum wage to inflation is more evidence, as if we needed it, that there isn’t a conservative bone in his body.

The following is from Sowell’s syndicated column (browser window title: “Minimum Wage Laws Are a Social Disaster for the Young and the Poor”) as it appeared at Investor’s Business Daily yesterday:

Romney Should Know Better About Minimum Wage Law

… Romney’s statement about not worrying about the poor — because they “have a very ample safety net” — was followed by a statement that was not just a slip of the tongue, and should be a defining moment in telling us about this man’s qualifications as a conservative and, more important, as a potential president of the United States.

… to people who call themselves conservatives, and aspire to public office, there is no excuse for not being aware of what a major social disaster the minimum wage law has been for the young, the poor and especially for young and poor blacks.

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% for black teenage males that it might come as a shock to many people to learn that the unemployment rate for 16- and 17-year-old black males was just under 10% back in 1948. Moreover, it was slightly lower than the unemployment rate for white males of the same age.

How could this be?

… (The reason is that) there was in practical effect no national minimum wage law in the late 1940s.

… It was in the wake of … (1950s minimum wage) 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.

For those for whom “racism” is the explanation of all racial differences, let me assure them, from personal experience, that there was not less racism in the 1940s.

… In Western European countries whose social policies liberals consider more “advanced” than our own, including more generous minimum wage laws and other employer-mandated benefits, it has been common in even prosperous years for unemployment rates among young people to be 20% or higher.

The economic reason is not complicated. When you set minimum wage levels higher than many inexperienced young people are worth, they don’t get hired. It is not rocket science.

It’s also not “compassionate” or “conservative” to condemn young people to unemployment when they could be developing the kinds of work-related skills which can only be learned on the job.

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