Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform — Why We Need It and What It Will Take.”
Last week, Ron Unz, a California businessman, submitted a ballot initiative to the California secretary of state that would raise the state minimum wage to $12 an hour in 2016 from the current $8. The federal minimum wage is $7.25.
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What is curious about the Unz initiative is that he is a conservative who defends a higher minimum wage on conservative grounds. In an interview with The New York Times, he said it would reduce government spending on welfare. A recent study from the University of California, Berkeley, estimated that welfare benefits for low-wage workers amount to $7 billion a year.
More controversially, Mr. Unz also contends that a higher minimum wage would curb illegal immigration. He has made this argument for some years in a variety of liberal and conservative publications.
Cleverly, Mr. Unz has turned the principal conservative argument against a higher minimum wage – that it would reduce jobs by making employment more expensive – into a virtue. As he wrote in a 2011 article in The American Conservative magazine, of which he was then the publisher:
The automatic rejoinder to proposals for hiking the minimum wage is that “jobs will be lost.” But in today’s America a huge fraction of jobs at or near the minimum wage are held by immigrants, often illegal ones. Eliminating those jobs is a central goal of the plan, a feature not a bug.
He asserted that those affected would primarily be newly arrived immigrants, those with the weakest ties to American society. Those who have been in the United States for a while, who have mastered English and put down roots, would likely be “grandfathered in” and not lose their jobs.
“In effect, a much higher minimum wage serves to remove the lowest rungs in the employment ladder, thus preventing newly arrived immigrants from gaining their initial foothold in the economy,” Mr. Unz wrote. Once this fact became known, it would discourage low-skilled immigrants from coming in the first place.
Interestingly, liberals have made this same argument. Writing in The New York Times in 2006, the former Massachusetts governor and 1988 Democratic presidential nominee Michael S. Dukakis and Daniel J.B. Mitchell, an economist at the University of California, Los Angeles, also defended a higher minimum wage partially on the grounds that it would disemploy illegal immigrants. As they explained:
If we want to reduce illegal immigration, it makes sense to reduce the abundance of extremely low-paying jobs that fuels it. If we raise the minimum wage, it’s possible some low-end jobs may be lost; but more Americans would also be willing to work in such jobs, thereby denying them to people who aren’t supposed to be here in the first place.
The idea that there are beneficial effects to excluding certain classes of workers from employment by having a minimum wage is not a new one. Indeed, early support for a minimum wage during the Progressive Era was based heavily on the expectation that it would price women out of the market.
As the Middlebury College economist Robert E. Prasch detailed in a 1999 academic article, progressives in the early 20th century had a very paternalistic attitude toward women. The first state minimum wages affected only women. This was often justified by the need to keep them from being tempted by prostitution, a point that was often made euphemistically. During debate on the minimum wage in 1912, the Public Service Corporation of New Jersey referred to “the pitfalls and temptations which beset young women who are thrown in contact with the world.”
The Princeton economist Thomas C. Leonard notes that another goal of minimum wages for women was to price them out of the labor market, thus reducing competition for jobs and raising wages for men. “A woman whose wages contributed to her family’s income was ordinarily scorned as a parasite and a usurper of wages that rightfully belonged to the male head of household,” he wrote in a 2005 academic paper.
In another paper, Professor Leonard points out that early supporters of the minimum wage were motivated by the idea of “eugenics” – that public policy ought to improve the quality of the human race, biologically. One way the minimum wage served this purpose was by making those considered mentally defective unemployable. Without jobs, it was thought, it would be impossible for them to marry and reproduce, thus serving a eugenic purpose.
Keeping native-born women out of the labor force also served the eugenic purpose of encouraging them to marry and have children. In a 1907 letter that was widely circulated, President Theodore Roosevelt was highly critical of those of “native American descent” who failed to reproduce sufficiently, saying they were contributing to “race suicide.”
Pricing immigrants out of jobs served a eugenic purpose as well. Many immigrants of that era were viewed as racially inferior. This view led to adoption of the Immigration Act of 1924, which encouraged immigration from regions view as racially superior and set strict quotas on those from places where the people were seen as racially inferior.
Consequently, it is not surprising that the Unz proposal has gotten strong support from those who strongly oppose immigration for racial reasons. The website VDARE.com (named for Virginia Dare, the first white child born in the New World) strongly supports it. A Feb. 20, 2013, commentary said a higher minimum wage would keep out “wetback labor.”
There are good arguments for raising the minimum wage. For example, an August study from the Federal Reserve Bank of Chicago said an increase in the federal minimum wage would raise aggregate spending in the economy and, hence, the real gross domestic product.
A higher minimum wage may also discourage some employment of illegal immigrants. But making an inadvertent side effect of the minimum wage its principal purpose may do more to divide potential allies than bring them together.