I was recently reminded of a point made by esteemed economist (the late) Walter E. Williams, concerning the impact of the minimum wage laws on young black Americans’ employment. At the time he wrote, black youth employment was four times that of the rest of Americans, although before federal (and state) wage minimums were legislated, they had been pretty much at par.
There is no doubt that minimum wage policies and laws have seriously damaged not the economy and society of both urban and rural black people, together with many other government policies. But that is just one factor in many causes of the decay – nay, the destruction – of black communities. From individual personal relationships to family to businesses to churches to education. Massive, multigenerational welfare is yet another. Especially welfare housing, even while housing was supposedly made “discrimination free” by government fiat. But certainly Walter is correct about the impact of minimum wage laws.
I realize that we have very much the same situation among young AmerIndians – particularly those on the reservations I’m familiar with.
Among these are the Lakota (Pine Ridge, Rosebud, Cheyenne River, Standing Rock, and Lower Brule), Navajo (Dineh), and Ute (Numu, at least at Ute Mountain and White Mesa), and the Blackfeet and others in Montana. All of these have massive unemployment problems. Problems far greater than what American blacks face, even in the inner cities. And for many of the same reasons.
Minimum wage rules exclude marginal workers, and magnify the impacts of discrimination in hiring and poor educations.
Consider young men and women who have been “educated” on the reservations to which they were confined in the 1800s. And now consider them their only “real” home. “Education” provided by BIA and tribal and other “public” schools (government-ruined and theft-funded institutions) which provide poor quality and rationed education.
Not only that, but these youth have been raised in an eight-generation-old culture of dependency on government. (Especially government handouts and control of real property supposedly “owned” by tribal members.) They are usually not able to be very productive workers in virtually any field until they are extensively trained and gain experience. And sadly, because of their home and community environment as they grow up, they are often lacking motivation to achieve and succeed. They are handicapped by their education and upbringing, often beyond redemption without tremendous courage and effort on their part and that of others trying to help.
Please keep in mind. Even the most abused and ill-educated of children CAN be capable of succeeding. Of overcoming their handicaps. Of lifting themselves up by the bootstraps. But to do so requires a free society and free economy. Societies and economies which open doors of opportunity. Including both the ability to find work where they can both be productive (for their employer) and gain experience an knowledge. Real-world experience and practical knowledge.
The mandatory minimum wage laws require that they often be paid more than their work is worth. Not what they are worth as a person, but what their labor is worth: their productivity. So we have people who cannot be as productive (as measured in dollars) as the government mandates they be paid for their time. So they must be subsidized. By someone: the business, family, some benevolent organization, or some government agency. But businesses exist by providing goods and services to people for a profit. Without a profit, they cannot exist. Even government agencies are supposed to ‘break even’ (according to cost-benefit analysis, as flawed as that is). And the resources of benevolent organizations are always limited – often by the ability of their donors to make a profit to have something to give.
But there is worse news.
Private (and public) investment in projects in Indian Country are always associated with great risk, for many reasons. And commercial endeavors – even such things as convenience stores and other retail business – are both at a major disadvantage competing with tax-subsidized tribal and government “enterprises” AND taxed and regulated heavily by multiple governments and agencies. This includes both minimum wage laws and laws mandating “Indian Preference” in hiring, training, and even ownership. (Note, many urban areas in the Fifty States have similar programs.)
This government intervention and damage to tribal societies and economies is not new. This has been going on since before the War Between the States. Especially in the West, the government (on behalf of settlers and business) destroyed the old traditional economy based on hunting, limited farming, and trade. The government scheme was based on commitments made in treaties with the FedGov. Treaties which the FedGov is rightfully condemned for breaking.
But not EVERY provision was broken: the promises of providing food, education, and healthcare in many treaties (for an indefinite time) has been extended to virtually every tribe, and expanded to include providing housing, land management and even cell phones! It is an evil history, and a course of action which has destroyed the AmerInd nations virtually across the continent. (That indefinite time was based on the expectation that either the tribes would die out, or be fully integrated into the larger economy and society. Fairly rapidly, not 150 years later. A discussion for a future time.)
“Do-gooder” ideas destroyed the AmerInd nations. Just as the minimum wage has dealt crippling blows to the American economy, and definitely the economies of many States and cities. Especially to black people.
But in reality, concepts like the minimum wage, racial/tribal hiring preferences, and insane taxation and regulation were damaging to everyone. Even those who promoted and implemented them, by destroying their moral compass and granting them more and more power, with less and less accountability.
Sadly, it is NOT going to get better in 2021.