[4/19/17] In 1966, Milton Friedman wrote an op-ed for Newsweek entitled “Minimum Wage Rates.” In it, he argued “that the minimum-wage law is the most anti-Negro law on our statute books.” He was, of course, referring to the then-present era, after the far more explicitly racist laws from the slavery and segregation eras of United States history had already been done away with. But his observation about the racist effects of minimum wage laws can be traced back to the nineteenth century, and they continue to have a disproportionately deleterious effect on African-Americans into the present day.
The earliest of such laws were regulations passed in regards to the railroad industry. At the end of the nineteenth century, as Dr. Walter Williams points out, “On some railroads — most notably in the South — blacks were 85–90 percent of the firemen, 27 percent of the brakemen, and 12 percent of the switchmen.”1
The Brotherhood of Locomotive Firemen, unable to block railroad companies from hiring the non-unionized black workers, called for regulations preventing the employment of blacks. In 1909, a compromise was offered: a minimum wage, which was to be imposed equally on all races.
To the pro-minimum wage advocate, this may superficially seem like an anti-racist policy. During this time, with racism still rampant throughout the United States, blacks were only able to enjoy such high levels of employment by accepting lower wages than their white counterparts. These wage-gaps at the time genuinely were the product of racist sentiment.
But this new wage rule, of course, did not eliminate the racism of nineteenth-century employers. Instead, it displaced their racism at the expense of black workers. One white union member at the time celebrated the new rule for removing “the incentive for employing the Negro.”2 This early minimum wage rule was explicitly put in place to prevent African-Americans from finding employment, and it was successful in this goal.
In the 1930s, racial views had hardly improved, if at all. Despite this, the unemployment rate among blacks was actually marginally lower than that of whites.3 Like the railroad workers, this was due to their willingness to accept lower wages than whites. But as infuriating as the employer racism at the time might be, the 1930s wage laws should incite even more anger.