Free To Choose: a personal Statement

Who Protects the Worker?
237
construction expenditures.' The effect of these acts is that the
government enforces union wage rates for much of construction
activity.
Even the use of violence implicitly involves government sup-
port. A generally favorable public attitude toward labor unions
has led the authorities to tolerate behavior in the course of labor
disputes that they would never tolerate under other circum-
stances. If someone's car gets overturned in the course of a labor
dispute, or if plant, store, or home windows get smashed, or if
people even get beaten up and seriously injured, the perpetrators
are less likely to pay a fine, let alone go to jail, than if the same
incident occurred under other circumstances.
Another set of government measures enforcing wage rates are
minimum wage laws. These laws are defended as a way to help
low-income people. In fact, they hurt low-income people. The
source of pressure for them is demonstrated by the people who
testify before Congress in favor of a higher minimum wage.
They are not representatives of the poor people. They are
mostly representatives of organized labor, of the AFL-CIO and
other labor organizations. No member of their unions works for
a wage anywhere close to the legal minimum. Despite all the
rhetoric about helping the poor, they favor an ever higher mini-
mum wage as a way to protect the members of their unions from
competition.
The minimum wage law requires employers to discriminate
against persons with low skills. No one describes it that way, but
that is in fact what it is. Take a poorly educated teenager with
little skill whose services are worth, say, only $2.00 an hour. He
or she might be eager to work for that wage in order to acquire
greater skills that would permit a better job. The law says that
such a person may be hired only if the employer is willing to pay
him or her (in
1979)
$2.90 an hour. Unless an employer is will-
ing to add 90 cents in charity to the $2.00 that the person's
services are worth, the teenager will not be employed. It has al-
ways been a mystery to us why a young person is better off unem-
ployed from a job that would pay $2.90 an hour than employed
at a job that does pay $2.00 an hour.
The high rate of unemployment among teenagers, and espe-

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238
FREE TO CHOOSE: A Personal Statement
cially black teenagers, is both a scandal and a serious source of
social unrest. Yet it is largely a result of minimum wage laws.
At the end of World War II the minimum wage was
40
cents an
hour. Wartime inflation had made that so low in real terms as to
be unimportant. The minimum wage was then raised sharply to
75
cents in
1950,
to $1.00 in
1956.
In the early fifties the unem-
ployment rate for teenagers averaged 10 percent compared with
about
4
percent for all workers—moderately higher, as one would
expect for a group just entering the labor force. The unemploy-
ment rates for white and black teenagers were roughly equal.
After minimum wage rates were raised sharply, the unemploy-
ment rate shot up for both white and black teenagers. Even more
significant, an unemployment gap opened between the rates for
white and black teenagers. Currently, the unemployment rate
runs around
15
to 20 percent for white teenagers;
35
to
45
per-
cent for black teenagers.' We regard the minimum wage rate as
one of the most, if not the most, antiblack laws on the statute
books. The government first provides schools in which many
young people, disproportionately black, are educated so poorly
that they do not have the skills that would enable them to get
good wages. It then penalizes them a second time by preventing
them from offering to work for low wages as a means of induc-
ing employers to give them on-the-job training. All this is in the
name of helping the poor.