Using his pen and phone strategy, President Obama passed an executive action raising the minimum wage for government contractors to $10.10 an hour. During the State of the Union, the President expressed his desire for Congress to follow suit and raise the federal minimum wage in kind. So where did the idea of a minimum wage come from? On radio this morning, Glenn and Stu laid out the history of the minimum wage… though you probably have a pretty good idea already.
“I want to show you how history absolutely repeats itself. And it repeats itself until somebody says, ‘Wait a minute. Hold it just a second. Water will certainly wet us. Fire will certainly burn,’” Glenn said. “As long as you allow people to say, ‘Shut up, you're not allowed to say that,’ history will repeat itself. And history repeats itself in the worst possible ways.”
If the minimum wage actually worked, it would be a job creator. It is not. In fact, it destroys jobs.
“What happens with the minimum wage? There are some jobs that are only worth a certain amount of money. It's not worth paying somebody $15 an hour to come here and lick stamps. It's just not worth it,” Glenn explained. “So what does that mean? A, it means your life becomes for miserable. You have to spend more time because the company has to now dump all that work you on, because they can no longer afford to have somebody do that task at this price. Now, if the company says, ‘We're just going to have to outsource it,’ then they outsource it to somebody they will pay much, much, less in Mexico or in India, so that job is gone.”
So where did the concept originate from?
“Well, they very clearly had an idea to get rid of the lower classes – a sort of Eugenic way to get rid of people who are inferior,” Stu explained. “They would price them out of the labor market so they wouldn't have jobs.”
Sidney Webb, English economist and co-Founder of the Fabian Society in the early 1900s, believed that establishing a minimum wage above the value of “the unemployables” as he called them, would lock them out of the market thus eliminating them as a class.
“Of all ways of dealing with these unfortunate parasites the most ruinous to the community is to allow them unrestrainedly to compete as wage earners," Webb said.
That was actually a common sentiment in America at the time. in America shared this belief as well. Around the same time, a Princeton economist said this:
“It is much better to enact a minimum-wage law even if it deprives these unfortunates of work… 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.”
Who was that Princeton economist? Royal Meeker, U.S. Commissioner of Labor, under Woodrow Wilson.
Doesn’t all make so much more sense now?
There is another aspect to the minimum wage that is equally important. A hike in the minimum wage isn’t just a hike in the minimum wage. It’s a hike in the union wage. And a hike in the union wage means more votes for the Democratic Party. It’s a self-fulfilling prophecy.
“And the other part of this, which I think is just as bad because I kind of had this disconnect my whole life with minimum wage,” Stu said. “They want to make it as a political issue, but why do they care? Why do unions support it so much?”
The United Food and Commercial Workers (UFCW) union explained the relation:
“Often times, union contracts are triggered to implement wage hikes in the case of minimum wage increases… such increases are one of the many advantages of being a union member.”
“ A hike in the minimum wage is not just a hike in the minimum wage. It's a hike in the union wage, and that's one of the reasons that they never talk with it, why the Democrats love this so much,” Stu continued. “They're pumping tons of dues and eventually campaign cash into their own campaigns by raising the minimum wage. It hikes up the union wages.”
“There's the truth,” Glenn concluded. “And history repeats itself. And we're going to complete the cycle.”
Stu had a more in-depth explanation on last week’s Wonderful World of Stu. Check out the monologue below:
Front page image courtesy of the AP