Activists Speculate MLK Would Support a $15 Minimum Wage…But Would He?

January 21, 2014

Yesterday supporters of a $15 minimum wage used the observation of Martin Luther King Jr. Day to rally their cause in Seattle.  The chairman of Seattle’s MLK Celebration Committee, Seattle City Councilmember Larry Gossett, endorsed the hijacking of the MLK celebration event to promote a $15 minimum wage, speculating, “He [Martin Luther King Jr.] would fight for this…why wouldn’t he?”

Of course there is no way to know whether MLK would fight for increasing the minimum wage for every worker to $15.  Based on decades of evidence and research, maybe he wouldn’t.

Studies overwhelmingly conclude that employment for low-skill workers, youth and minorities declines when the minimum wage is raised.  The higher the wage relative to what the market dictates, the greater the decline. 

A summary of the last two decades of research from economists at the University of California-Irvine and the Federal Reserve Board found that 85% of the most credible studies on the minimum wage point to job loss for less-skilled employees.  And in a more recent study, the same economists found, “…the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others, and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage.”

The reality is increasing the minimum wage would relegate even more of the most disadvantaged individuals, including low skill, young and minority workers, into poverty.  If employers have to pay workers more, they will find ways to pay fewer people.  The people they do hire at the artificially higher wage are more likely to be those with some work experience and skills.  The result is fewer jobs for unskilled workers.

The Wall Street Journal’s forecasting survey released last week shows 54% of economists oppose raising the minimum wage because it reduces the incentive of employers to hire and hurts the economy.   

Still don’t understand why minimum wage hikes hurt the people the law is designed to help?  For the best explanation, watch this oldie-but-goodie 1975 interview with Nobel-Prize winning economist Milton Freidman, who called minimum wage laws “the most anti-black law in the land.”

“The fact is, the programs labeled as being “for the poor,” or “for the needy,” almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have.

Let me give you a very simple example – take the minimum wage law.  Its well-meaning sponsors—there are always in these cases two groups of sponsors—there are the well-meaning sponsors and there are the special interests, who are using the well-meaning sponsors as front men.  You almost always, when you have bad programs, have an unholy coalition of the do-gooders on the one hand, and the special interest on the other.  The minimum wage law is as clear a case as you could want.  The special interests are of course the trade unions – the monopolistic trade craft unions.  The do-gooders believe that by passing a law saying that nobody shall get less than $2 per hour or $2.50 an hour or whatever the minimum is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure, that people whose skills, are not sufficient to justify that kind of a wage will be unemployed.

It is no accident that the teenage unemployment rate — the unemployment rate among teenagers in this country — is over twice as high as the overall unemployment rate. It’s no accident that that was not always the case until the 1950’s when the minimum wage rate was raised very drastically, very quickly. Teenage unemployment was higher than ordinary unemployment because, of course, teenagers are the ones who are just coming into the labor market — they’re searching and finding jobs, and it’s understandable that on the average they would be unemployed more. But it was nothing like the extraordinary level it has now reached — it’s close to 20%.

The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills.  That’s what the law says.  The law says here’s a man who has a skill that would justify a wage rate of $1.50 or $2, but you may not employ him, it’s illegal, because if you employ him you must pay him $2.50 per hour. So what’s the result?  To employ him at $2.50 per hour is to engage in charity.  Now there’s nothing wrong with charity. But most employers are not in the position to engage in that kind of charity. Thus, the consequences of minimum wage laws have been almost wholly bad.  We have increased unemployment and increased poverty.

Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.”

Comments

MLK Would Support $15 Now

My answer to the question posed in your article's title is YES. MLK would support the $15 Now movement. The best evidence for that answer is MLK's unqualified support for the 10 demands made in the 1963 March on Washington. One of those demands was for a $2.00 an hour minimum wage, which in 2014 dollars is $15.23. (according to the Economic Policy Institute---"yes" the left also has think tanks and economists)
Additionally, you are in gross error when you characterize the $15 Now issue as having been a "hijacking" of the MLK celebration event in Seattle. That term is defined to include elements such as (1) "Stop and Steal" and (2) "to take control by force" (see Merriam-Webster dictionary)
Most people at the Seattle event willingly and knowingly embrace the $15 issue and understand thoroughly that it continues the struggle for a portion of MLK's "Dream". No such sentiment can ever exist between a hijacker and the hijacked. So--the $15 issue did not hijack the event---instead---the people of the event co-opted and warmly embraced the issue for the reasons above stated.