Monday, 26 April 2010

Minimum wage is racist [updated]

I’ve been receiving emails for days saying I should watch Roger Douglas’s impassioned speech to the House last week, berating the National Party for their failure to support his bill abolishing the ban on youth rates. 

The ban, instituted by Sue Bradford, has seen youth unemployment soar--locking youngsters out of work, especially Maori youngsters who have been particularly badly hit.  More than one in four youngsters are now out of work (26.5%), and the rate for young Maori is 38.7%.

The rate of unemployment for both has accelerated under Bradfords’s ban.

Douglas’s bill would have given them the opportunity to get their first step onto the employment ladder.  It was voted down by the National Party, the Labour Party, the Maori Party and the Green Party.

Even accounting for the fact that Douglas is no speaker, he rips apart their hard-hearted insistence that youngsters unable to deliver $510 of productive value to an employer should go to hell.

It seems appropriate to post the concurrent view of black economist Walter Williams, who points out,

    “One of the more insidious effects of minimum wages is that it lowers the cost of racial discrimination; in fact, minimum wage laws are one of the most effective tools in the arsenals of racists everywhere, as demonstrated by just a couple of examples. During South Africa's apartheid era, its racist unions were the major supporters of minimum wages for blacks. South Africa's Wage Board said, ‘The method would be to fix a minimum rate for an occupation or craft so high that no Native would likely be employed.’ In the U.S., in the aftermath of a strike by the Brotherhood of Locomotive Firemen, when the arbitration board decreed that blacks and whites were to be paid equal wages, the white unionists expressed their delight saying, ‘If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain.’
    “Tragically, minimum wages have the unquestioned support of good-hearted, well-meaning people with little understanding who become the useful idiots of charlatans, quacks and racists.”

“Useful idiots.”  “People with little understanding.”  That describes the occupants of the NZ parliament to a tee, doesn’t it.


  1. Powerful speech from Douglas.

    I saw one of your past post PC on this same topic that you linked to Eric Crampton's web page where he posted up a collection of major academic economic studies on minimum wage. The links are excellent readings. Perhaps, you can update this post by linking to that Eric's collection of links on minimum wage.

    It amazes me that politicians and lawmakers have ignored the disaster evidence of raising minimum wages.

  2. 100% agree with that post PC.


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