Thomas Sowell raps Mitt on the minimum wage

posted at 4:15 pm on February 7, 2012 by Jazz Shaw

Mitt Romney caught considerable flack for an interview he did with CNN when he made his now famous, “worrying about the very poor” comment. And by this point, most people – including the candidate – realized that it was a seriously tone deaf turn of a phrase during a national campaign. But some other, less often noted comments he made later in the interview caught the attention of economist Thomas Sowell. He is less concerned with scoring political points and more worried about one of Romney’s actual policy positions regarding the minimum wage.

Romney has come out in support of indexing the minimum wage law, to have it rise automatically to keep pace with inflation. To many people, that would seem like a small thing that can be left for economists or statisticians to deal with.

But 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.

This is a perennial subject of fierce debate in political circles to this day. While most all conservatives are able to point to the deleterious effects of a continually rising minimum wage, there are a number of different positions on how to address it. These include simply slowing or freezing the minimum wage, gradually reducing it to hover below labor market demand levels, or abandoning it entirely. The latter comes with some perils of its own, since a “race to the bottom” (as progressives term it) could find a wage floor which is not later met by a commensurate drop in prices for many common staples.

But Sowell provides a useful history lesson in his column, with one of the chief points being to note that when he was working an entry level, unskilled job as a messenger in the 1940s, he was actually earning 50% more than the mandated minimum of the time. He further points out that black teenagers – traditionally one of the highest unemployment demographics in the nation- actually had a lower unemployment rate back then than the general working public at large.

Perhaps some of this will be looked upon as wishing for bygone days which are never to return, but the math certainly seems to support the theory. As long as the economy is unleashed to create demand in the jobs market, wages will follow the needs of employers. When wages are artificially driven above a level Sowell describes as, “higher than many inexperienced young people are worth,” employers simply minimize their hiring. And, as he also notes, that part isn’t rocket science.


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If the govt comes in and tells me I have to pay him $10 but he only produces $8, I won’t ever bother hiring him. That’s econ 101. Which is why liberals don’t understand.

angryed on February 7, 2012 at 4:55 PM

Emphasis mine.

But you will hire someone else. I assume there is more than one guy in the labor pool.

BocaJuniors on February 7, 2012 at 5:04 PM

Not necessarily. Most likely the work in question can be automated. Which means I will find a machine that can do the same work. Or if the work can’t be done my a machine, I will find ways to get by with 1 less employee through process improvements, technology, etc. At the end of the day, paying someone $X to give me less than $X back is bad business. Which is why MW laws hurt employment of the very people they claim to help – low end, low skilled labor that can be worked around.

angryed on February 7, 2012 at 5:10 PM

The true minimum wage always was, is now, and always will be $0/hr. Today 2 million more people are earning this wage than when Obama took office.

Rich H on February 7, 2012 at 5:10 PM

right2bright on February 7, 2012 at 5:02 PM

My apologies – I missed your correction. In that case, of course, I agree with your comment on the savings aspect. On the education front though, I beg to differ. Having done business in Asia, it is my realization that their factory workers perform well as long as things work within a fixed set of rules. If they are required to innovate (which they have to when things don’t go according to plan), they rely completely on their bosses to show them direction. This can be traced to their education as well as their socio-cultural systems (obedience over free-thinking).

peter_griffin on February 7, 2012 at 5:11 PM

Conservatives look at the MW in terms of economic impact.

Liberals (including Romney) look at it in terms of “does it make me feel good”.

angryed on February 7, 2012 at 5:11 PM

It offends me as a black person that he will be attacking Mitt using such coded racial BS. He needs to stop it. He can support the socialist all he wants, but the racial stuff is nonsense.

Chudi on February 7, 2012 at 4:27 PM

What offends me is you playing the race card.

From Dr. Sowell Oct 18, 2005

My brother recalled his younger days down South during the Jim Crow era, when he had a job working late. After work, he had a long walk back home in the middle of the night. But, he says, “When I got to the black neighborhood, I felt safe!” That speaks volumes about what has happened since then.

Wade on February 7, 2012 at 5:11 PM

If you honestly think the average person pays more attention to the hard news than Facebook, then my apologies.

kim roy on February 7, 2012 at 5:02 PM

Yes, it is a race to the bottom. A “Palinization” of politics, but to be honest she is hardly the first and won’t be the last. I look at my parents’ generation and see one that admired intellectuals, strived to educate themselves by reading good books, and stayed abreast of current events.

Now, we have a cornucopia of nonsense and hero worship. Palin, Obama, Hannity, Olbermann…they’re not as different as some of us would like to think. Rush is entertaining, and more often than not right, but he so often strays from thinking in a straight logical line that it infuriates.

/rant off

So yeah, “the average person” spends more time clicking “Like” on funny photos than reading the newspaper. I don’t find that comforting. Do you?

BocaJuniors on February 7, 2012 at 5:12 PM

The true minimum wage always was, is now, and always will be $0/hr. Today 2 million more people are earning this wage than when Obama took office.

Rich H on February 7, 2012 at 5:10 PM

Nice try, however $0 is not a wage so no cigar. But you made your point.

Wade on February 7, 2012 at 5:14 PM

Only about 2.5% of all hourly workers in the US earn MW. Which means the discussion is almost moot. EXCEPT for the fact that as someone else noted already, union contracts are tied to the MW. Which means a higher MW = higher union wages. Which is the real reason we have Democrats in favor of ever and ever higher MW rates.

angryed on February 7, 2012 at 5:14 PM

Romney is right. Minimum wage should rise with inflation. Sometimes we have to look out for the less fortunate. Not everyone is able to have a better education to better themselves. The idea that raising the minimum wage kills jobs is the biggest peace of horse sh#t I have heard in my life

I agree with Willard 100% on this

liberal4life on February 7, 2012 at 4:25 PM

Well, you are a liberal, right?

American Dream 246 on February 7, 2012 at 5:18 PM

Whenever this minimum-wage argument rears its head, I ask one question:

Why is it illegal for me to be willing to work for less than the minimum wage, especially if the alternative is to not work at all?

I’m still waiting for a coherent answer that doesn’t involve name-calling and/or two-dimensional caricatures of business owners.

Paul_in_NJ on February 7, 2012 at 5:19 PM

OK, but … Newt? This is an improvement, Tom?

Ronnie on February 7, 2012 at 5:26 PM

Anyone who has a high school diploma or equivalency and can’t earn more than the legal minimum wage should be considered as a failure of our education system – not employers. Reform the education system.

Anyone who is 21 or over who neither has nor is actively seeking a high school diploma or equivalency should be exempt from the legal minimum wage.

Rich H on February 7, 2012 at 5:28 PM

ok…..

So Sowell, one of the best of the conservative Intellectuals, has committed the one unpardonable heresy…

thou shalt not speak ill of Romney, ever, even if it’s the same principle you’ve always advocated, or that you’re correct in your judgement..

He’s not supporting Romney, so the mudslinging begins, Heaven forbid he have an honest opinion of his own. Got to check with the Mittler youth first..

mark81150 on February 7, 2012 at 5:28 PM

Most likely the work in question can be automated. Which means I will find a machine that can do the same work. Or if the work can’t be done my a machine, I will find ways to get by with 1 less employee through process improvements, technology, etc. At the end of the day, paying someone $X to give me less than $X back is bad business. Which is why MW laws hurt employment of the very people they claim to help – low end, low skilled labor that can be worked around.

angryed on February 7, 2012 at 5:10 PM

Exactly. But what’s the alternative? I can envision the following arguments:

- No minimum wage, “it’s not a problem to foment a perpetual class of unproductive, low-wage citizens.”
- No minimum wage, “few adults/breadwinners make this wage anyway.”
- Minimum wage, “but let’s educate the unemployed (due to MW) so they can be more productive.”
- Minimum wage, “but let’s do nothing helpful for/with the unemployed (due to MW).”

We seem to be opting for #4, I think #3 is the most realistic. #1 is totally undesirable, and #2 is an impossible political sell.

BocaJuniors on February 7, 2012 at 5:29 PM

Paul_in_NJ on February 7, 2012 at 5:19 PM

The one clear reason is that it helps simplify the business owners’ decision process. For my business, I always want to make sure I am paying my employees a “fair wage” – and if someone has already gone through the trouble of figuring out a number that can help employees maintain a decent standard of living, I will go with that. It also helps me figure out the minimum cost of running a business on US soil.

As for why you, as an employee, cannot work for anything less than that – that’s more a question of preventing a race to the bottom (which may not hurt you but can definitely hurt other future employees in terms of their living standards).

peter_griffin on February 7, 2012 at 5:31 PM

Santorum and Gingrich both supported increases to the minimum wage in Congress.

Top_Down

Which one of them voted to have the minimum wage rise automatically with inflation?

While most all conservatives are able to point to the deleterious effects of a continually rising minimum wage, there are a number of different positions on how to address it.

Here’s an idea that I’m sure even the libs will get on board with. Since the economy boomed during the Clinton administration, we should go back to the minimum wage in place during the Clinton administration.

Right libs?

I agree with Willard 100% on this

liberal4life moron4life

FIFY.

xblade on February 7, 2012 at 5:34 PM

Ignorance is bliss Sowell,

Santorum and Gingrich both supported increases to the minimum wage in Congress.

Top_Down on February 7, 2012 at 4:17 PM

came here to say this. it was already said and its all that matters.

get a clue, conservatives.

Drunk Report on February 7, 2012 at 4:43 PM

Ok, so they are all wrong on this issue.

Where does Paul stand on it?

Thomas, love ya man, but this is no reason to not vote for Romney. It is not a reason to vote for Newtron either.

Gunlock Bill on February 7, 2012 at 5:36 PM

Ok, so they are all wrong on this issue.

Where does Paul stand on it?

Thomas, love ya man, but this is no reason to not vote for Romney. It is not a reason to vote for Newtron either.

Gunlock Bill on February 7, 2012 at 5:36 PM

OIC where you’re coming from. Romney should be forgiven because he’s just like everyone else. I call bullshit.

gryphon202 on February 7, 2012 at 5:45 PM

The article is good – except for one important factoid that Sowell ignores… outsourcing.

peter_griffin on February 7, 2012 at 4:35 PM

He’s not ignoring it; he’s simply addressing the specific phenomenon.

You could just as easily said he was ignoring the other regulations that other economies aren’t burdened with as entry level job killers.

It seems to me the issue needs to be addressed more from a sociological, cultural, or spiritual perspective than an ecomonic or legislative perspective.

There are other factors at work in the black community today that weren’t present in the 1950′s and are driving up the unemployment rate in that community as well. Eliminating the restrictions on entry level employment might go a long way to ameliorating some of the cultural disfunctions that have grown up in a community where simply doing a job well as an important facet of a fullfilled life is not recognized today as it once was.

Cleombrotus on February 7, 2012 at 5:52 PM

OIC where you’re coming from. Romney should be forgiven because he’s just like everyone else. I call bullshit.

gryphon202 on February 7, 2012 at 5:45 PM

If you can’t forgive Romney for this issue then you can’t forgive Santorum or Newtron either.

Not without hypocrisy anyway.

Gunlock Bill on February 7, 2012 at 5:55 PM

Thomas Sowell is an anti-capitalist. He could use some education on how free markets work.
/

james23 on February 7, 2012 at 5:57 PM

If you can’t forgive Romney for this issue then you can’t forgive Santorum or Newtron either.

Not without hypocrisy anyway.

Gunlock Bill on February 7, 2012 at 5:55 PM

Forgiveness means never having to say you’re sorry. I’ve never had to wonder where Santorum stood on anything, even when I disagreed with him. Name one thing that Santorum has EVER played both sides of an issue on, and I MIGHT come around to believing he’s just like Newt and Romney. Until you can do that, I will maintain in my belief that Rick Santorum is the least odious of an all-around terrible slate of candidates.

gryphon202 on February 7, 2012 at 5:59 PM

Exactly. But what’s the alternative? I can envision the following arguments:

- No minimum wage, “it’s not a problem to foment a perpetual class of unproductive, low-wage citizens.”
- No minimum wage, “few adults/breadwinners make this wage anyway.”
- Minimum wage, “but let’s educate the unemployed (due to MW) so they can be more productive.”
- Minimum wage, “but let’s do nothing helpful for/with the unemployed (due to MW).”

We seem to be opting for #4, I think #3 is the most realistic. #1 is totally undesirable, and #2 is an impossible political sell.

BocaJuniors on February 7, 2012 at 5:29 PM

You’re talking about the political aspect of it. I’m talking about the economic aspect of it.

Economics will dictate that MW laws = fewer employment opportunities for low end, low skilled workers. Politicians of course will ignore this and keep raising the MW because they want to make everyone feel good.

The American electorate is so illiterate when it comes to economic issues, education them is a fool’s errand. Remember, people think that if they get a tax refund in April it means they paid no taxes. Explaining to them marginal cost theory would be like me explaining to my dog why he’ll never catch the car.

angryed on February 7, 2012 at 6:05 PM

So yeah, “the average person” spends more time clicking “Like” on funny photos than reading the newspaper. I don’t find that comforting. Do you?
BocaJuniors on February 7, 2012 at 5:12 PM

Many of those Facebook posts were printed as op-eds in those newspapers you claim to read. She’s not using it to share the latest 4chan memes.

Walter Sobchak on February 7, 2012 at 6:06 PM

Whenever this minimum-wage argument rears its head, I ask one question:

Why is it illegal for me to be willing to work for less than the minimum wage, especially if the alternative is to not work at all?

Paul_in_NJ

The short answer is (in essence) because you’re suffering from some kind of delusion that having a job is better than being unemployed which does not fit into the progressive ideal that everyone should have some minimum wage by law. BTW, I don’t mean that as an ad hominen about you.

IMO, it is the way that some people in general, who favor the minimum wage, and progressives in particular feel about someone who might be willing to work at less than a wage they feel is appropriate, if it came right down to why a minimum wage.

So they are protecting you from yourself because they know better. They would never have to take a minimum wage job, because their options are much greater or they have a job, so they feel good about not letting you work for less because you deserve to have a given minimum wage (if you could find that job).

Russ808 on February 7, 2012 at 6:08 PM

If you honestly think the average person pays more attention to the hard news than Facebook, then my apologies.

kim roy on February 7, 2012 at 5:02 PM

Yes, it is a race to the bottom. A “Palinization” of politics, but to be honest she is hardly the first and won’t be the last. I look at my parents’ generation and see one that admired intellectuals, strived to educate themselves by reading good books, and stayed abreast of current events.

Now, we have a cornucopia of nonsense and hero worship. Palin, Obama, Hannity, Olbermann…they’re not as different as some of us would like to think. Rush is entertaining, and more often than not right, but he so often strays from thinking in a straight logical line that it infuriates.

/rant off

So yeah, “the average person” spends more time clicking “Like” on funny photos than reading the newspaper. I don’t find that comforting. Do you?

BocaJuniors on February 7, 2012 at 5:12 PM

ITA and no, I find absolutely no comfort in it. The politicians count on it. That’s how they get away with so much. F&F, for instance, is out there. It can be found with just a couple of clicks. We can blame the media (which has a large part in it), but the ultimate responsibility lies with the citizen and the average citizen only cares about American Idol.

kim roy on February 7, 2012 at 6:20 PM

Romney is right. Minimum wage should rise with is part and parcel of what CAUSES inflation. Sometimes we have to look out for the less fortunate. Not everyone is able to have a better education to better themselves. The idea that raising the minimum wage kills jobs is the biggest peace of horse sh#t I have heard in my life

I agree with Willard 100% on this

liberal4life on February 7, 2012 at 4:25 PM

no charge for the correction.

Jesus Henry Milton KeeeeeRIST do the math – raising the minimum wage only serves to drive UP the cost of goods at the shopping level of those who “think” they are gaining something by said rise……….it’s totally a “feel-good-so-vote-for-my-liberal-dumb-ass” move that doesn’t gain any low wage earners anything…………

Katfish on February 7, 2012 at 6:22 PM

Dr Sowell is right..Mitt made a mistake here..Team Romney should walk this back and not let it happen again..:)

Dire Straits on February 7, 2012 at 6:25 PM

Haven’t read the thread, but I’ll say this: He does know better. It’s called pandering.

LtGenRob on February 7, 2012 at 6:31 PM

Haven’t read the thread, but I’ll say this: He does know better. It’s called pandering.

LtGenRob on February 7, 2012 at 6:31 PM

This is why Romney is worthless to us, actually let me rephrase that. This is why Romney is destructive to conservatism.

1) He does not really know better, as he does not understand how it hurts the poor.
2) He does really know better, because as a businessman he never would pay someone to do something if they were not producing a major benefit for him above and beyond the money he pays them.
3) He cannot articulate conservative ideals in a way that makes people desire conservative policy or a lack of policy if that is the conservative route as opposed to the progressive policy.
4) This leaves him open to pathetic panders, and not just on this issue, but pretty much all of them, panders which at some point have consequences, such as passed laws that damage the conservative brand name.

astonerii on February 7, 2012 at 6:52 PM

Dr Sowell is right..Mitt made a mistake here..Team Romney should walk this back and not let it happen again..:)

Dire Straits on February 7, 2012 at 6:25 PM

Is a direct full on frontal assault on a core principle of out free market capitalism something that we can just simply excuse as a mistake and allow the person to move on?

Mitt Romney got every single news outlet and political pundit out there calling Newt Gingrich and myself Anti-capitalists for having the nerve to say that some of Willard Mitt Romney’s (specific person) business deals (here again, specific instances) were questionable and should be looked at more closely.

Here we have Willard Mitt Romney specific attacking the core aspect of a free market capitalist economy that is easily confered as value for value in the specific form of wage controls.

One of these really is an actually attack on capitalism that will have actual factual end results, the other one will not effect so much as a single stock price for a single trade at any point in time in this known universe.

astonerii on February 7, 2012 at 7:00 PM

astonerii on February 7, 2012 at 7:00 PM

Mitt made a mistake on the min. wage issue..Newt made a bigger mistake when he attacked Bain Capitial..IMHO..:)

Dire Straits on February 7, 2012 at 7:12 PM

Mitt made a mistake on the min. wage issue..Newt made a bigger mistake when he attacked Bain Capitial..IMHO..:)

Dire Straits on February 7, 2012 at 7:12 PM

So attacking the actual free market in total is a superior position than attacking a single actor of millions for a few of their specific activities.

Now so I understand your position fully, you are saying Bain capital, the company that bought Damon Corporation, that under their guidance and control ramped up massive levels of medicare fraud, a criminal activity, for hundreds of millions of dollars and was criminally fined $119M, shortly after all that fraud allowed them to sell at a $12m profit to another company? That bain is above reproach and totally beyond any criticism?

astonerii on February 7, 2012 at 7:18 PM

Santorum and Gingrich both supported increases to the minimum wage in Congress.

Top_Down on February 7, 2012 at 4:17 PM

Makes all 3 contenders dead wrong.

Ignorance is bliss Sowell,

Top_Down on February 7, 2012 at 4:17 PM

It sure is!

Schadenfreude on February 7, 2012 at 7:26 PM

astonerii on February 7, 2012 at 7:18 PM

Newt attacked capitailism by going after Bain Capital..Romney was pandering..IMHO..:)

Dire Straits on February 7, 2012 at 7:27 PM

Newt attacked capitailism by going after Bain Capital..Romney was pandering..IMHO..:)

Dire Straits on February 7, 2012 at 7:27 PM

Isn’t pandering to something that would devastate the free market capitalist system attacking capitalism, as that pander will be used to actually drive that policy to fruition.

Where as what Newt did would do absolutely nothing to the free market capitalist system. Nothing at all, it was not even done in a way that it had ties to a policy proposal. Just an attack on the character of a person in fact. While what he did was legal, is it an activity that you as a voter find appealing in your president?

Not that I recall much about what you have written in the past, but you are no longer someone I will ever give any credibility to.

astonerii on February 7, 2012 at 7:35 PM

Not that I recall much about what you have written in the past, but you are no longer someone I will ever give any credibility to.

astonerii on February 7, 2012 at 7:35 PM

Okay..Good deal..:)

Dire Straits on February 7, 2012 at 7:40 PM

Get rid of the minimum wage law today and the giant sucking sound you will hear tomorrow will be the sound of jobs being sucked back homeward across our shores.

One of the biggest examples of government over-reach is the minimum wage law.

oakland on February 7, 2012 at 8:12 PM

Romney is right. Minimum wage should rise with inflation. Sometimes we have to look out for the less fortunate. Not everyone is able to have a better education to better themselves. The idea that raising the minimum wage kills jobs is the biggest peace of horse sh#t I have heard in my life

I agree with Willard 100% on this

liberal4life on February 7, 2012 at 4:25 PM

really? You do know that for example in Oregon, for every one outsourced call center ‘order taker’ sitting in Utah, three McDonald’s employee or would be employee doesn’t have a job in Oregon? The math is simple, and the interwebs that Oboobi blames for tellers being out of work–one employee Manning a terminal and phone can process three times as many orders for multiple McDonald’s as one physically standing by the cash register and intercom at just one restaurant.

Everytime the MW is raised, resourceful owners find a way to increase productivity thru technology and eliminating deadwright carbon units. As for education, this country has offered 12+ years of free education, those who spurned it did so because they didn’t want to be seen as ‘acting white’ in front of their dumber than rocks peers. That and a unionized teacher corps that views their perks & package as more important than their charges. And so here we are with 30+% unemployed and unemployable black youth.

The MW needs to be abolished and wages will eventually find its equilibrium within a year or so. Only then will the youths begin to find work. It may be menial, but at least they’re getting a day’s pay for honest work.

AH_C on February 7, 2012 at 8:13 PM

Thomas Sowell has long been our best brain on economic matters. He’s right, of course.

J.E. Dyer on February 8, 2012 at 12:09 AM

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