Hornberger's Blog

Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
Here's the RSS feed or subscribe to our FFF Email Update to receive Hornberger’s Blog daily.

Chronic Minimum-Wage Ignorance


I find it absolutely amazing that there are still people who support the concept of a government-established minimum wage. There are plenty of statist programs and policies that are faulty and destructive, but minimum-wage laws rank near the top of statist programs whose fallaciousness and harm are easiest to see.

It’s just fascinating that there are still people in life who think that poverty can be ended or alleviated by simply having the government pass a law. Sometimes I wonder why they don’t just enact a law that makes poverty illegal. Wouldn’t that be easier than doing it indirectly with the enactment of a minimum-wage law?

Two days ago, the New York Times editorial board continued minimum-wage nonsense by pointing to Germany as a model for the United States.  Observing that Germany’s minimum wage would soon be higher than that of the United States, the Times suggested that we should be concerned that the United States is falling behind European countries.

That’s ironic in two ways.

For one thing, the United States was born as a nation in opposition to European statism. Throughout the ages, Europe has been mired in state economic planning, regulation of economic activity, licensures and permits, labor immobility, high taxation, redistribution of wealth, public schooling, and government welfare programs.

It was European statism that Americans rejected when they brought the United States into existence. Thus, it’s not a coincidence that for more than a century our American ancestors lived without such programs as income taxation, Social Security, Medicare, Medicaid, occupational licensure, state economic planning, mandatory equalization of wealth, and extensive economic regulations.

That’s how the term “free enterprise” came into usage — as a way to describe a way of life in which economic enterprise was free from government control, regulation, and direction, unlike the situation in Germany and the rest of Europe.

It was also not a coincidence that throughout the 19th century thousands of penniless immigrants were fleeing the European lands of statism to come to the land of free enterprise. Keep in mind, after all, that our American ancestors, as part of their commitment to free enterprise, also favored the concept of open immigration.

The other ironic aspect to the Times editorial is that when the United States abandoned the philosophy of free enterprise in favor of economic statism, it was largely due to the efforts of Progressives, who were drawing their ideas from German socialists from the late 1800s and early 1900s.

Take a look at this link on the website of the U.S. Social Security Administration: http://www.ssa.gov/history/ottob.html. That’s a bust of Otto von Bismarck in full military uniform. He was known as the “Iron Chancellor of Germany.”

Now, you might ask: What in the world is the bust of a German ruler doing on the website of a major U.S. federal agency. It’s because the idea of Social Security, along with minimum-wage laws and other socialistic, fascistic ideas, came from Bismarck, who in turn got the ideas from German socialists.

The Times editorial states: “In Germany, as in the United States, business lobbyists and some economists have warned that a robust minimum wage will lead to job losses and higher prices, but that has not been the historical experience.”

Really? How is it possible that the members of the editorial board of the New York Times aren’t familiar with articles like the following?

Black Teen Unemployment Jumps to 39%

Black Teen Unemployment Rate Rises to 43 Percent in February

92% of Black Male Teens Unemployed in Chicago, 83% Nationally

How is such massive, chronic unemployment not part of “the historical experience”? Don’t those black teenagers matter?

They do matter, and they are the biggest victims of minimum-wage laws, the ones who pay the biggest price for this statist program. The government locks them out of the labor market with its artificially high minimum wage, prohibiting them from competing against rich or middle-class white kids by offering to work at a lower wage rate. They’re then precluded from learning what it’s like to work in a business or to operate a business in their early, formative years. Inevitably, the result is that they end up in the drug trade (as part of another government program with racist aspects, the war on drugs) or end up living a life on the government welfare dole, where the state manages and controls their lives until they die.

If only black teenagers and their families would figure all this out. Wouldn’t it be great to see massive anti-minimum wage protests and demonstrations by unemployed African American teenagers, along with all others who have been adversely impacted by minimum-wage laws? I wonder if the members of the Times editorial board would lead the counter-demonstrations.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.