Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Who Is a Racist? A Conversation with Prof. Jack Anderson
I had a conversation with my friend Jack Anderson, a retired physics professor at the University of Pittsburgh. I am a retired Professor of Public and International Affairs at Pitt, an economist.. I described the wonderful book I was reading by Jason Riley, a black editorial page staff member of the Wall Street Journal, entitled Please Stop Helping Us, in which he writes, as I have done, about the racial impact of the federal and state minimum wage laws, I described the minimum wage laws as supporting the monopolistic practices of labor unions to restrict competition from employers who pay lower wages and that the first minimum wage was passed by Congress and signed by FDR at the request of the labor unions. I said it was a racist law. Jack asked, “Did the unions intentionally want to prevent the employment of blacks? If not, how can you describe them and the law as racist?.” By the effects, I replied. Until 1950, the unemployment rate of blacks was actually less than that of white workers. With each successive increase in the minimum wage, the rate of unemployment of blacks increased relative to whites. That is why I describe it as a racist law. Following are recent government figures:
The only thing that has changed since 1950 when blacks had lower unemployment rates than whites, is the successive increases in the minimum wage.
If employers tried to force retailers to set a minimum price for their products, as they have succeeded for milk in many states and in state liquor stores for wines and liquors, economists would describe it as a monopolistic practice. Such actions by employers would violate the anti-monopoly laws of the federal government and injured retailers could sue the companies for damages and to end the practice. But unions are exempt from the antitrust laws and so are government enterprises. Unemployed blacks and other unskilled workers have no recourse for the damages they suffer under the minimum wage. They become dependent on government and are a principal support of the Democratic Party which campaigns for increased minimum wages.
Of course, all unskilled workers are discriminated against by the minimum wage laws in the sense that if they are willing to work for 25 cents less than the minimum wage, no employer can hire them. They cannot even compete for government jobs although governments have not been accused of exploiting workers. The government since it is spending other people’s money, the taxpayers’, can afford to be generous. Every government employee is employed at more than the minimum wage, even unskilled workers.
Our conversation continued. Who is a racist? Intent and motive determines whether one is a racist, he replied. I described the following incident when I was a student at the University of Chicago. A group of students including myself and some back students visited a local restaurant which did not serve blacks in an attempt to get the restaurant owner to end the discrimination against blacks. We were not served. The restaurant owner explained, “I have nothing against blacks, but I do not want to lose my white customers?” Was he a racist? Not by Jack’s standards. Were the white customers racist? None of them present raised any objection to our presence. Apparently, the only racists were us, the group of which I was a part for raising race as an issue..
It reminds me of an incident that occurred when I was a bombardment group adjutant, a second lieutenant, at the air base at Ephrata, Washington. We were fairly isolated in Ephrata and, thanks to the USO, we were visited by groups of entertainers from time to time. They were usually white and the girls were pretty and after their performances, they were invited to the officers’ club for drinks and dancing. One night we had a black group, including some pretty black girls, and the base commander had them lodged with the enlisted men. They were not invited to the Officers Club as visiting entertainment groups usually were and I took umbrage and took it upon myself to invite them. I bought them drinks and danced with the girls. Well, the next morning all hell broke loose. My secretary, Jean Johnson, came into our office and told me tearfully that her husband forbade her to continue working for me. Most of my fellow officers placed me in Coventry.
A day or two later,I was visited by Capt. John Weibel who was forming a new bomb squadron at the air base in Spokane, Washington. He was a southern gentlemen, from Georgia as I recall. He asked me if I would be interested in becoming his adjutant in the 600th Bomb Sq., 398th Bomb Group, a reunion of which I recently attended.. Indeed, I was and accepted immediately, starting on a career that ended in the European theatre in the Eighth Air Force. which ultimately led to my ultimate rank as Lt. Col., USAFR. So all’s well that ends well. Well, almost. Major Weibel lost his life on his fourth mission over Germany. I shall always treasure his memory. HE was certainly not a racist!
Well, to get back to Jack. Jack, a racist is identified by his actions, not by his beliefs or intentions. The MINIMUM WAGE IS RACIST although admittedly white unskilled workers and teenagers are also discriminated against. Look again at the above figures. 48 percent of black teenagers 18-19 years of age seeking employment were unemployed in 2013. What a disgrace! And the American people, including Jack Anderson, believe the minimum wage should be raised even further!
Comment by Jesse, 9/20/2014:
It's an interesting discussion the two of you had! It is really quite striking how the wage gap opened up by the 1960s. For a nice graph of this, with data going back to the 1880s, see http://people.ucsc.edu/~rfairlie/papers/published/aer%201997%20-%20RacialUnemp.pdf
And this paper does raise the minimum wage as one possible explanation. Of course there are others as well. Here's the full set of speculative explanations offered in the paper.
"Some potential culprits that are not easily accounted for using the census data include government interventions in the labor market (such as the minimum wage and unemployment insurance), changes in the locus of discrimination away from explicit wage differentials to biased hiring and layoff decisions, weakened enforcement of anti-discrimination laws, and the effects of crime and family structure on black men residing in impoverished urban areas."
Response to this comment by Raymond L Richman, 9/21/2014:
Comment by Jack Anderson, 9/22/2014:
The sole point I was trying to make in my discussion with Ray was that calling the minimum wage racist may not help in advancing his argument against the minimum wage. If one searches Google for the word "racism" one finds several definitions of the word as well as a lengthy discussion in a Wikipedia article. The Merriam-Webster dicitonary defines racism briefly as:
1. poor treatment of or violence against people because of their race
2. the belief that some races of people are better than others
Ray has stated that after the minimum wage was introduced black unemployment rose. Whether it rose because of the minmum wage or for other reasons is not clear. As they say, correlation does not prove causation.
In any case, one can argue against the minimum wage without bringing up racism. I think bringing up racism muddies, rather than clarifies, the argument.
Last 100 Years
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: