Thomas Sowell raps Mitt on the minimum wage

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.

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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.

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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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