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Minimum Wage and the Ghettoes

The more I think about it, the more I believe that the most practical way to get people working in our ghettoes is to repeal national and–where applicable–local Minimum Wage laws. [Edit: long term, by far our worst problem is the existence of monetary policy, particularly one controlled by unelected elites with massive conflicts of interest; but that is even farther out than the extremely difficult challenge of convincing people that wage controls generate far less wealth for everyong than free markets]

This is a blunt and politically incorrect way of putting this, but Mexicans who came into this country illegally are taking the jobs American blacks used to do. Unemployment rates among black people used to be close to zero; they were lower than the rates for white people. Now, among young kids in the ghettoes, they are pushing 50%.

Businesses operate for profit. This means they look for good deals. If you can pay people in America $3/hour for something you are paying a Malaysian $2/hour for, but having to transport the finished goods back here,then that is a good deal.

All sustainable positive relationships are win/win. People take jobs because they are better than being unemployed. People offer jobs because they are better than not using capital productively. This does not mean that people like their jobs on either side–there are many unhappy rich people out there, trust me–but that at that time and place it was the best they could do.

The people who disrupt this process are, in my view, the real exploiters, those who insist on Minimum Wages for OTHERS, while never suffering the consequences of such policies themselves. Such people have government jobs, nice pensions, and normally start out middle class and comfortable.

As a general policy recommendation we need to make it so that poverty and the accusation of racism don’t pay so well.