Free Market Discrimination

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"Free Market Discrimination"

Low-paying businesses can be counted on to oppose any minimum wage increase on the grounds that it distorts the “free market” for labor. But what would such a “free” market look like? Cato Institute scholar Walter E. Williams offers a surprisingly candid peek:

A more insidious effect of minimum wages, as racists everywhere know, is that it lowers discrimination costs. Say a white and a black were equally productive and an employer prefers white workers to black workers. Since he has to pay $9 an hour no matter whom he hires, the cost of discriminating against the black worker is zero. But if it were legal for the black worker to offer a lower price, there’d be a cost to discrimination.

Not only does Williams seem comfortable with a world in which there are wage disparities based on race, but he actually advocates for the worker to accept the second-class status since, well, at least he has a job. The black worker is earning less than the white worker while doing the same job but, well, he has a job! And instead of blaming the employer for his discriminatory hiring practices, Williams wants to blame minimum wage laws.

– Erica Stephan

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