America is embroiled in a national debate over whether the minimum wage should be raised or not. I’m writing this letter to you to seek your support of the position we libertarians take, which advocates a total repeal of the minimum wage.
Supporters of the minimum wage tell you that it has no harmful effects. Nonsense! Just ask the tens of thousands of unemployed black teenagers all over the country. They’re the biggest victims of the minimum wage. They’ll tell you that not being able to get a job constitutes big harm to them.
Black teenagers have an unemployment rate of 30-40 percent. That range of unemployment for this group of people in American society is chronic. The cause of this permanently high rate of unemployment for black teenagers is the minimum wage.
To put it as succinctly as I can, American employers simply are not willing to hire black teenagers at $7.25 an hour. They will be even more unwilling to hire them at $10 an hour.
Why is this so? It might be racial bigotry. Or it might be that American employers find that white kids are better educated or better suited for the job. The reasons why they’re not willing to hire black teenagers at $7 an hour or higher are irrelevant. All that matters is that we know they’re unwilling to do so, as manifested by the chronically high unemployment rate among black teenagers.
But suppose those unemployed black teenagers offered to work at $4 an hour or $2 an hour or even for free. In that case, everything changes. American employers might well find it in their self-interest to hire a black kid at $2 an hour or at some other rate below the legally established minimum wage.
Would this be in the interests of black teenagers? You bet it would! It would get them into the door in the economic marketplace. It would give them a chance to learn how a business operates. It would teach them important business concepts like getting to work on time, pleasing consumers, cooperation with fellow workers, and pride in workmanship.
Getting a job at $2 an hour or at any rate below $7 an hour would enable those black teenagers to learn the skills that would empower them to move upward in the workplace or even one day start their own businesses. By locking them out of the labor market when they’re eager to get a job, the minimum wage denies them all of those opportunities.
That’s a disaster. After all, what do those unemployed black teenagers do? You know what all too many of them do. They go on drugs out of a sense of hopelessness and despair. Or they’re sucked into the drug trade as a result of the war on drugs (another federal program with adverse racial consequences), where they learn the skills associated with black-market business practices, such as murder, robbery, and theft. More often than not, they end up spending a large portion of their lives in some penitentiary.
Consider those rich white students who intern for members of Congress. They work for free because congressmen have exempted themselves from the minimum-wage laws that they impose on the rest of us, including those black teenagers. Why are those rich white kids willing to work for free? Because they’re willing to sacrifice in the short term to learn the skills relating to congressional work–you know, such as how to call bribes “campaign contributions.”
There is another factor to consider here. Imagine how many new businesses would be opened by black entrepreneurs if there were no minimum-wage laws. They would be free to hire black teenagers and friends in the neighborhood with lower wages until the business got on its feet. Minimum-wage laws prevent those new businesses from coming into existence, thereby protecting the well-established firms from competition.
Those black teenagers need your help. They need you to take a public stand against the minimum wage itself. They need the minimum wage abolished. Will you help them?
The Future of Freedom Foundation