Minimum wage law is treated across several episodes of The Bob Zadek Show as a government intervention in the labor market that restricts the freedom of employers and workers to set wages by agreement, and that, in the account of some guests, prices the least-skilled workers out of employment. The excerpts discuss federal, state and local wage laws, their historical origins, and whether they should exist at any level of government.
Federalism and the level of wage-setting
In a discussion of California residency and federalism, Bob Zadek asks Joe Mathews whether, given the benefits of federalism, there should be no federal minimum wage and states should decide, just as he would have states decide immigration policy California Discovers Federalism (2018). Mathews answers that he is not a big fan of minimum wage laws and does not like the statewide one in California much either. He says that because California’s regional economies are so different, if such laws are to exist they should be at a regional level rather than a state level, and certainly not a federal level. He describes minimum wage advocacy as something people reach for out of desperation over inequality and the decline of the middle class, because it is something they can do. Zadek then asks how about setting wages at the level of the market and never mind government at all; Mathews replies that Zadek’s libertarian bona fides are unchallenged, and says that if it is to be done, it should be done by the people living in and dealing with the economy, in consultation with people who work there and own businesses there. He expresses a preference for participatory democracy in which regular folks with backgrounds in the economy or as employers decide regional economic policy.
Minimum wage as a barrier to escaping poverty
In an episode on libertarian anti-poverty policy, Michael Tanner argues that rather than debating whether to increase or cut poverty spending, policy should look at government policies that make people poor Libertarian Anti-Poverty Policy (2019). Among these he lists the criminal justice system and over-criminalization, the government-run school system, government housing policies that drive up the cost of housing, policies that discourage savings among poor people and encourage consumption, and policies that block poor people from participating in the economy — ranging from occupational licensure and zoning to minimum wage laws that, in his account, prevent poor people from getting a start in the American economy.
The racist history and effect of minimum wage laws
In an episode on a libertarian theory of anti-racism, Zadek asks Michael Tanner whether minimum wage laws are inherently racist in their effect, not in the words of the statute, and whether they are a perfect example of governmental systemic racism Towards a Libertarian Theory of Anti-Racism (2020). Tanner answers that minimum wage laws were historically in many cases intended to block African American participation in many labor fields, and that the people who sponsored this legislation were in many cases explicit about being worried about African American laborers undercutting white wages, in many ways the same way people now worry about immigrants undercutting wages. He says they created occupational licensing laws, union shops where African Americans could not belong to the union, and minimum wage laws that simply priced out a lot of African Americans from the labor market. Tanner adds that today’s advocates of minimum wage are certainly not racist and that nobody is out there saying they are trying to keep African Americans out of the labor force, but that it still has the same impact of doing so, particularly for young African American men, particularly those who do not have a lot of attachment to the labor force or to a big skill set, because it blocks entry-level into the labor market.
Zadek then offers listeners an exercise: he says that in preparing for shows on minimum wage laws he found on the web an audio record of a hearing, which he believes was in 1948, of the US Senate Labor Committee, at which JFK, then a senator, and Jacob Javits, described by Zadek as a Republican but a very progressive Republican at a time when there were such things, discussed a federal increase in the minimum wage. According to Zadek, JFK insisted the minimum wage be increased because his constituents, the Irish in Massachusetts in general and Boston specifically, were complaining that blacks were taking their jobs, and said he needed an increase in the minimum wage laws to protect the white people’s job. Zadek characterizes minimum wage laws as having the subliminal or buried purpose of preventing blacks, who were willing to work for less because they needed the money more and had less skills, from undercutting whites who were not willing to work for less, and says the best way to get rid of that competition is to keep the minimum wage laws high. He offers the theory that if an employer had to pay $3 an hour, he might as well pay a white person rather than overpay a black person who was only worth $2.50, and calls this a perfect example of a systemically racist statute on the books today which ought to be complained about by those who complain about systemic racism, but of course they do not.
Minimum wage and eugenics
In an episode on government and the coronavirus, Jeffrey Tucker discusses the history of demographic panic and government planning, saying that progressives at the turn of the 20th century wanted to use eugenics and marriage licensing laws Big government can’t save us from coronavirus (2020). He states that there was a widespread belief all the way into the 1910s and 1920s that if they could stop people from getting married or stop them from working, which he gives as one of the reasons for minimum wage laws, then they could stop them from procreating, which he says we now know is utterly ridiculous.
Minimum wage and small business
In an episode on the decline of American independence, Zadek argues that when bargaining power is relatively equal, as with a hair salon, a local gym or other small business, there is no power imbalance and no need for government protection, because a dissatisfied customer simply does not return The Decline of American Independence (2020). He says that with small business there is no need for economic interference, no need for minimum wage laws and not much need for employment law, because a worker can quit and go to a different hair salon, gym or plumber, and jobs are plentiful, and nobody has an economic monopoly. He concludes that the interests of small business and of ordinary consumers in their relationship to government are perfectly aligned. Robert C. Wright responds that Zadek has captured the essence of what he was driving at.
Across episodes: no development
The excerpts show minimum wage law raised in four episodes — California Discovers Federalism, Libertarian Anti-Poverty Policy, Towards a Libertarian Theory of Anti-Racism, and Big Government Can’t Save Us from Coronavirus, with a related exchange in The Decline of American Independence — but they do not show the same question argued and then revisited with a changed treatment; each episode approaches the topic from a different angle, and the excerpts show no development from an earlier to a later position.
What the sources do not cover
The excerpts do not state the current federal minimum wage, any state or local minimum wage figure, or the name of any minimum wage statute or bill. They do not describe any court case on minimum wage law or identify which constitutional provision such cases turned on. The 1948 Senate Labor Committee hearing is described only as Zadek recalls it, and the excerpts do not give the hearing’s formal title or confirm the date.