It is a grave fallacy to try to claim that productivity is the sole or even the main arbiter of income. Are investment bankers highly paid because of high productivity? To say they are would be laughable! It would be just as ridiculous to claim high paid lawyers are paragons of production. The author may be highly educated, but his ignorance is towering! He needs to learn more about the real world and rethink his flawed conclusions.

There is a fixation with matters of race, religion and sex there. It’s a problem that needs to be faced square on. Laws and regulations delay that from ever occurring.

I did not find race,sex and religious problems to be as common in Europe. They certainly are not such a big deal in Australia or New Zealand or most of the Pacific (although there are those who profit from stirring up trouble by making big claims). Not in China either.

Governments weild power and are seen as an authority in many matters. Many people defer to what their govts decide or promote. It’s a default mode for them. Easy to do.

First step is to eliminate govt regulations and laws such as those described in the article. Those laws are racist. How can it be expected that rational thinking and acting could be derived from such nonsense? Next is to let people decide for themselves what they want to do. If they want to exclude rational decisions from certain aspects of their lives, let them. They’ll be the ones who ultimately pay the cost. Leave the rest of us to get on with life as it ought to be lived.

Sione

I know there is no data, but if you look at people like Henry Ford, Walt Disney, and many other captains of their industries they clearly beleived blacks were inferior and would only hire them for the lowest paying jobs.

In short, I agree that government intervention made things a lot worse, but I don’t see how racism would have just withered away if we let those in power continue to be brutally racist. The remedy should be something along the lines of protecting the rights of all individuals rather than implementing some social management scheme.

Finally, and I don’t mean to start a flame war here, but too many of the people advocating this line of reasoning in the public discourse are at best ignorant and at worst racist. I am not saying billwald is racist, but please get your facts straight. Blacks do not have a lock on welfare – the majority of welfare recipients are not black. Arts organizations recieve the most donations, not welfare programs for blacks. This article just showed in statistics how massive government intervention has screwed black people. Given this history, on top of Jim Crow and people’s racist attitudes (which granted is a lot better now than 40 years ago) I think it’s understandable that some of them are on welfare. We can debate what the best action (or no action) is, but I think we should have some sympathy for the victims. They did not bring it on themselves.

Other “racial” groups do not have this problem. Illegal Mexicans can find jobs and send $hundreds back to their families in Mexico. A friend is part of management in a small iron foundry. He says that they can only hire Hispanics because neither white nor black people want to do the work. It is a union shop!

African-American people have a defective culture which didn’t exist before 1964. (I’ll be happy to explain why.) Every year for the last 30 or so years the African-American community in Seattle holds “Buy Black Week.” The purpose is to encourage black people to patronize black businesses.

This boggles the mind. There has never been a buy Chinese (Jewish, Korean, Mexican, Japanese, Italian, Swedish . . . ) week in the history of the world! Lynnwood, WA (just north of of Seattle) has a humongus Korean community. I just noticed a large Korean community in the south end of Tacoma. Far as I know, there is only one Korean person elected to Washington’s state or county govts. None of the do-goodersever mention that our Korean, Chinese, Vietnamese . . .citizens are vastly under-represented in out state governments but a big deal is made over every African-American candidate. Apparently African-American people have finally discovered that they can vote themselves money but only if they hold public office.

The Korean People? They are to busy building small businesses, becomming professsionals, and helping their children to earn the awards and scholarships to mess with politics.

And here is another problem. Employers could do the same thing with blacks, yet unemployment among blacks is high and unemployment among illegal immigrants is low. Again, you are going to have to resort to sociological arguments, not economic ones, in order to keep this blog politically correct.

Well, that rests on the assumption that employers are paying whites more than the minimum wage AND more than their productivity merits, because since the minimum wage applies across the board, it is still possible for non-racist employers to exploit the racist employer’s refusal to hire blacks. It follows that it is at least possible for black unemployment to be attributable to other factors, such as their lower productivity. In this particular instance, the Austrians seem to be deriving a conclusion from statistics, a process they otherwise reject as inapt.

Your statement also begs these questions. If I decided as an NFL team owner only to hire blacks at tailback, would I go out of business? If I decided as a banker or jeweler only to hire Ashkenazi Jews, would I go out of business?

No, it is called a “subjective value judgement”. If faced with the problem of an artificial cap on wages, an employer can only rely on his or her value judgement for other factors besides the value for the money. If some people are predispossed to think that whites are more productive, for whatever reason, then that person will only hire whites. Is this racism? Maybe, maybe not, but the result would be the same: the employer leaves out other non-white people because him or her would go with what he or she knows or what he or she is familiar. This explains why, for example, the unemployment level of African and Mideastern immigrants in France is very high: faced with a *very* high minimum-wage, employers have to go with what they know, and that would be French nationals. This even if those immigrants were more than willing to work for a lower wage than the official cap. This also explains why the unemployment level of undocumented immigrants in the US is NOT high – because employers circunvent the law in order to pay lower wages. If made to pay the minimum, the perceived value of the immigrants would not be enough to justify the higher wage and thus the employer would not hire them.

I am not making a sociological argument here, Reactionary. I am looking at this entirely from an economic point of view, because remember: VALUE IS SUBJECTIVE. The point of the article is that, taking out the minimum wage, employers that WERE racist would find themselves at a disadvantage if hiring only whites, instead of hiring those that are willing to work for less. Without a minimum wage, it would not be profitable to be racist. WITH the minimum wage, however, it would not matter if the employer is racist or not.

Aren’t both your arguments both seems to be presuming that folks are all equally productive if they fall below the productivity level required to make genuinely make minimum wage? It could also be argued that even if were there no minimum wage law there’d still be folks who are that unproductive to a particular job that they aren’t worth hiring at all.

You and the author of this article are making sociologic arguments, not economic arguments. I started out at minimum wage with no skills other than a desire to work and learn. I and other white teenagers moved upward, so why can’t blacks at the same rate? Your answer, as it must be, given your pre-determined conclusion and the way the statistics are coming out, is white racism. Thus, your “economic” argument rests on several sociological assumptions. Now that’s fine so far as it goes, but you need to drop the dispassionate economist act.

Not all. Only the inexperienced. It is still a game of “Who do you prefer” when it comes to an inexperienced youth – who had access to the better schools? Who had access to the better homes, or family, or was out of trouble? The minimum wage STILL outbids the apparently less productive people.

“”In a free labor market, the wage offered is equal to the marginal revenue product of labor, period.”

And, so the argument goes, if there’s a mandatory minimum wage then there is no market for labor that cannot produce an equivalent marginal revenue. So if blacks are disparately impacted by the minimum wage, it must mean that they are less productive.”

YES, at the TIME, many blacks were less productive than competing whites. Additionally, racism helped keep the bidding low, making their POTENTIAL productivity relative to their labor HIGHER. But this isn’t what I stated, I stated that the wage offered, accepted and the worker retained for blacks, at the time, coming off the plantations and into the cities was lower. They were demanding fewer dollars per unit output than whites. White union members correctly saw this as price competition and proceeded to have it outlawed by the institution of the minimum wage.

“”ABSENT THE MINIMUM WAGE OR FORCED UNIONISM, a racist employer who refused to hire blacks would find himself losing to less-racist firms that did hire blacks, since in the long run the racist employer’s productivity per labor dollar would be lower.”

Still not following this. If the minimum wage applies across the board, then the only way the racist employer who only hired whites would be penalized is if he is paying his whites more than the minimum wage. In which event the opportunity still exists for a non-racist employer to underbid a racist employer for black labor.”

The minimum wage is PURPOSELY SET above the MRP of low-skilled black / female / child / Mexican labor to put / keep the (for now) lower-priced / lower-productivity workers out. This traps them at a low-productivity level, the employer is trapped in the short run because he will lose money paying the minimum wage to individuals whose MRP is < the minimum wage. The workers with wages above the current minimum wage are protected from competition from lower-priced individuals.

Basically, minimum wage laws, if set high enough to be effective, ‘work’ by protecting the jobs of productivity-stagnant current workers, and preventing the aquisition of needed skills by low-productivity workers by keeping their labor off the market, often forever.The minimum wage is THE most racist, sexist, ageist device known to economic man.

None of this actually overcomes any of the points of the article – it is offered to improve the precision of just where (as between employers and employees) racism (or anti-diversity) arises. Most employers tending to hire all one kind of person to work in a particular place or function are just trying to keep the peace and minimize expensive race riots in the workplace, even while improving communications (people of similar ethnic and linguistic backgrounds work together more effectively, as illustrated in the tower of Babel).

When the marginal productivity of individual employees is rendered moot, at least in a range, as by Minimum Wage legislation, group factors like these come to the fore. EmployERs get a bad rap for racism, or anti-diversity.

Reactionary, are you saying that blacks and whites of the time had equal productivity on average, or that the great majority of the empoylers were racist and cold not run a bussiness well? Both seem to be redidiculous statements. Excuse spelling

But they already are since the minimum wage applies across the board. So unless the white employer is paying whites more than the minimum wage AND more than their productivity merits, in which event he should eventually go out of business, it’s difficult to see how the minimum wage is keeping blacks out of the labor market.

At the least, Westley’s thesis requires several assumptions, including that blacks are generally less productive. Fortunately he covers himself by attributing it to, what else, white racism.

Reactionary, I do not see how this contradicts what Vince was indicating. I believe this comment is redundant, and not contrary.

In which event the opportunity still exists for a non-racist employer to underbid a racist employer for black labor.

Maybe, but there is no reason to think a racist employer would still have some kind of personal problems with money so as to give it away by paying MORE than the minimum.

Vince’s point is this: without minimum wage, non-racist employers would be FREE to hire blacks at a lower wage, thus underbidding a racist employer. This would mean that in the long run, the level of employment for black and whites would be around the same, even with a disparity on their level of productivity – comparative advantage would be in play within a totally free employment market.