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Author Topic: Minimum Wage as Eugenics  (Read 12624 times)
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« on: January 15, 2014, 06:43:29 AM »

An interesting paper on the relationship between economics and eugenics by Thomas C. Leonard from the Journal of Economic Perspectives can be found here: http://www.princeton.edu/~tleonard/papers/retrospectives.pdf

I thought his discussion of minimum wage laws as implementation of eugenics to be fascinating. Here is the section in discussion:

The Eugenic Effects of Minimum Wage Laws

During the second half of the Progressive Era, beginning roughly in 1908,
progressive economists and their reform allies achieved many statutory victories,
including state laws that regulated working conditions, banned child labor, instituted
“mothers’ pensions,” capped working hours and, the sine qua non, fixed
minimum wages. In using eugenics to justify exclusionary immigration legislation,
the race-suicide theorists offered a model to economists advocating labor reforms,
notably those affiliated with the American Association for Labor Legislation, the
organization of academic economists that Orloff and Skocpol (1984, p. 726) call
the “leading association of U.S. social reform advocates in the Progressive Era.”
Progressive economists, like their neoclassical critics, believed that binding
minimum wages would cause job losses. However, the progressive economists also
believed that the job loss induced by minimum wages was a social benefit, as it
performed the eugenic service ridding the labor force of the “unemployable.”
Sidney and Beatrice Webb (1897 [1920], p. 785) put it plainly: “With regard to
certain sections of the population [the “unemployable”], this unemployment is not
a mark of social disease, but actually of social health.” “Of all ways of dealing with
these unfortunate parasites,” Sidney Webb (1912, p. 992) opined in the Journal of
Political Economy, “the most ruinous to the community is to allow them to unrestrainedly
compete as wage earners.” A minimum wage was seen to operate eugenically
through two channels: by deterring prospective immigrants (Henderson,
1900) and also by removing from employment the “unemployable,” who, thus
identified, could be, for example, segregated in rural communities or sterilized.
The notion that minimum-wage induced disemployment is a social benefit
distinguishes its progressive proponents from their neoclassical critics, such as
Alfred Marshall (1897), Philip Wicksteed (1913), A. C. Pigou (1913) and John Bates
Clark (1913), who regarded job loss as a social cost of minimum wages, not as a
putative social benefit (Leonard, 2000).
Columbia’s Henry Rogers Seager, a leading progressive economist who served
as president of the AEA in 1922, provides an example. Worthy wage-earners, Seager
(1913a, p. 12) argued, need protection from the “wearing competition of the casual
worker and the drifter” and from the other “unemployable” who unfairly drag
down the wages of more deserving workers (1913b, pp. 82–83). The minimum
wage protects deserving workers from the competition of the unfit by making it
illegal to work for less. Seager (1913a, p. 9) wrote: “The operation of the minimum
wage requirement would merely extend the definition of defectives to embrace all
individuals, who even after having received special training, remain incapable of
adequate self-support.” Seager (p. 10) made clear what should happen to those
who, even after remedial training, could not earn the legal minimum: “If we are to
maintain a race that is to be made of up of capable, efficient and independent
individuals and family groups we must courageously cut off lines of heredity that
have been proved to be undesirable by isolation or sterilization . . . .”
The unemployable were thus those workers who earned less than some measure
of an adequate standard of living, a standard the British called a “decent
maintenance” and Americans referred to as a “living wage.” For labor reformers,
firms that paid workers less than the living wage to which they were entitled were
deemed parasitic, as were the workers who accepted such wages—on grounds that
someone (charity, state, other members of the household) would need to make up
the difference.
For progressives, a legal minimum wage had the useful property of sorting the
unfit, who would lose their jobs, from the deserving workers, who would retain their
jobs. Royal Meeker, a Princeton economist who served as Woodrow Wilson’s U.S.
Commissioner of Labor, opposed a proposal to subsidize the wages of poor workers
for this reason. Meeker preferred a wage floor because it would disemploy unfit
workers and thereby enable their culling from the work force. “It is much better to
enact a minimum-wage law even if it deprives these unfortunates of work,” argued
Meeker (1910, p. 554). “Better that the state should support the inefficient wholly
and prevent the multiplication of the breed than subsidize incompetence and
unthrift, enabling them to bring forth more of their kind.” A. B. Wolfe (1917,
p. 278), an American progressive economist who would later become president of
the AEA in 1943, also argued for the eugenic virtues of removing from employment
those who “are a burden on society.”
In his Principles of Economics, Frank Taussig (1921, pp. 332–333) asked rhetorically,
“how to deal with the unemployable?” Taussig identified two classes of
unemployable worker, distinguishing the aged, infirm and disabled from the
“feebleminded . . . those saturated with alcohol or tainted with hereditary disease
. . . [and] the irretrievable criminals and tramps. . . .” The latter class, Taussig
proposed, “should simply be stamped out.” “We have not reached the stage,”
Taussig allowed, “where we can proceed to chloroform them once and for all; but
at least they can be segregated, shut up in refuges and asylums, and prevented from
propagating their kind.”5
The progressive idea that the unemployable could not earn a living wage was
bound up with the progressive view of wage determination. Unlike the economists
who pioneered the still-novel marginal productivity theory, most progressives
agreed that wages should be determined by the amount that was necessary to
provide a reasonable standard of living, not by productivity, and that the cost of this
entitlement should fall on firms.6
But how should a living wage be determined? Were workers with more dependents,
and thus higher living expenses, thereby entitled to higher wages? Arguing
that wages should be a matter of an appropriate standard of living opened the door,
in this era of eugenics, to theories of wage determination that were grounded in
biology, in particular to the idea that “low-wage races” were biologically predisposed
to low wages, or “under-living.”7 Edward A. Ross (1936, p. 70), the proponent of
race-suicide theory, argued that “the Coolie cannot outdo the American, but he can
underlive him.” “Native” workers have higher productivity, claimed Ross, but
because Chinese immigrants are racially disposed to work for lower wages, they
displace the native workers.
In his Races and Immigrants, the University of Wisconsin economist and social
reformer John R. Commons argued that wage competition not only lowers wages,
it also selects for the unfit races. “The competition has no respect for the superior
races,” said Commons (1907, p. 151), “the race with lowest necessities displaces
others.” Because race rather than productivity determined living standards, Commons
could populate his low-wage-races category with the industrious and lazy
alike. African Americans were, for Commons (p. 136), “indolent and fickle,” which
explained why, Commons argued, slavery was required: “The negro could not
possibly have found a place in American industry had he come as a free man . . .
[I ]f such races are to adopt that industrious life which is second nature to races of
the temperate zones, it is only through some form of compulsion.” Similarly,
Wharton School reformer Scott Nearing (1915, p. 22), volunteered that if “an
employer has a Scotchman working for him at $3 a day [and] an equally efficient
Lithuanian offers to the same work for $2 . . . the work is given to the low bidder.”
When U.S. labor reformers reported on labor legislation in countries more
precocious with respect to labor reform, they favorably commented on the eugenic
efficacy of minimum wages in excluding the “low-wage races” from work. Harvard’s
Arthur Holcombe (1912, p. 21), a member of the Massachusetts Minimum Wage
Commission, referred approvingly to the intent of Australia’s minimum wage law to
“protect the white Australian’s standard of living from the invidious competition of
the colored races, particularly of the Chinese.” Florence Kelley (1911, p. 304),
perhaps the most influential U.S. labor reformer of the day, also endorsed the
Australian minimum-wage law as “redeeming the sweated trades” by preventing the
“unbridled competition” of the unemployable, the “women, children, and Chinese
[who] were reducing all the employees to starvation . . .”
For these progressives, race determined the standard of living, and the standard
of living determined the wage. Thus were immigration restriction and labor
legislation, especially minimum wages, justified for their eugenic effects. Invidious
distinction, whether founded on the putatively greater fertility of the unfit, or upon
their putatively greater predisposition to low wages, lay at the heart of the reforms
we today see as the hallmark of the Progressive Era.
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« Reply #1 on: January 20, 2014, 10:37:02 PM »

Fascinating it might be.  But all government incursion into the marketplace is destructive and counterproductive.  Minimum wage "law" is perhaps among the most egregious intrusions, because it eliminates jobs and curtails trade all the way around. 

Whenever the marketplace is attacked by psychopaths http://agoracosmopolitan.com/home/Frontpage/2008/01/02/02073.htmlhiding under the mantle of "state", poor people become poorer. 

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« Reply #2 on: May 03, 2014, 02:39:30 AM »

There have been a lot of talks over minimum wage. It is a vital policy tool that provides a floor to wages. In his last State of the Union, President Obama announced his plan to increase the minimum wage to $9 an hour. Some retailers didn't like the idea, but Costco's CEO supports the proposal. He would like to raise it to $10.10 an hour. Here is the article: Raising the Minimum Wage.
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« Reply #3 on: May 03, 2014, 06:39:46 AM »

There have been a lot of talks over minimum wage. It is a vital policy tool that provides a floor to wages. In his last State of the Union, President Obama announced his plan to increase the minimum wage to $9 an hour. Some retailers didn't like the idea, but Costco's CEO supports the proposal. He would like to raise it to $10.10 an hour. Here is the article: Raising the Minimum Wage.

The motives are all too clear on this one.  Costco already pays higher wages than the competitors, and likely employes fewer people.  Forcing everyone else to pay the same wages as them, with their larger workforce will cause much higher costs for the competitors.  It isn't related to the topic of the thread, just people trying to screw up the competition. 

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« Reply #4 on: May 08, 2014, 04:26:46 AM »

Agree with you, is he trying to create monopoly?

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« Reply #5 on: May 08, 2014, 06:32:18 AM »

Agree with you, is he trying to create monopoly?


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