This week’s Bad Bill is thankfully just a joint resolution, but is important to spotlight as it advocates a topic that continues to be hotly debated both here in NC and nationwide. SJR 838, sponsored by Sens. Earline Parmon (D-Forsyth) , Don Davis (D-Greene) and Angela Bryant (D-Halifax) is a resolution urging the General Assembly to consider taking up legislation to increase the state’s minimum wage.
The equivalent resolution has also been filed in the House as HJR 1068, and is sponsored by Reps. Alma Adams (D-Guilford), Pricey Harrison (D-Guilford), Rick Glazier (D-Cumberland) and Becky Carney (D-Mecklenburg).
A minimum wage law, in essence, outlaws employment. If two parties voluntarily agree to trade money for labor, they should be free from government interference to determine at what rate this exchange should take place. Limiting opportunities for exchange does not make people better off.
Simple supply and demand tells us that the higher the price of a good, the less of that good will be demanded, other things being equal. In this case, if the “price” of labor (i.e. wages) is artificially raised, there will be fewer willing buyers of labor (employers). The result: higher unemployment.
The effects of course will be felt most dramatically among low-skilled, low-income people who will be priced out of the labor market. Minorities and immigrants are hardest hit by minimum wage laws. Indeed, the first minimum wage law in the U.S., the Davis-Bacon Act of 1931, was motivated by racist intentions. As pointed out by economist Walter Williams, the law “virtually eliminated blacks from federally financed construction projects when it was passed.”
Thomas Sowell also points out how the minimum wage has been used to keep minorities and immigrants from accessing jobs in several nations across the world for generations. Such a sordid history has lead Williams to label the minimum wage as “one of the most effective tools in the arsenal of racists everywhere in the world.”
Not only does the minimum wage disproportionately harm native low-skill minorities, it also harms immigrants trying to earn a living and assimilate to the culture. The city of Seattle recently approved a hike in their minimum wage to $15 an hour. In response, the “Ethnic Community Coalition” of Seattle laid out what that would mean to immigrants in the city.
“First, we would need to reduce our work force and hire only highly skilled employees. Over 10 percent of low-wage workers in Seattle do not speak English well. Right now, we hire many recent immigrants who would not likely be able to find other work in such a competitive market. At $15/hour, we would have to reduce our staff and only hire skilled, experienced workers who speak English fluently.”
Because a government-mandated minimum wage outlaws voluntary labor agreements, creates compulsory unemployment, and cruelly cuts off opportunities especially for minorities and immigrants, SJR838/HJR1068 is this week’s Bad Bill of the Week.