Early Progressive, Race-Based Rational for the Minimum Wage

From the same article, From Eugenics and Economics in the Progressive Era by Thomas C. Leonard, that I quoted in a recent post on immigration comes this bit as well (emphasis added):

Progressive economists, like their neoclassical critics, believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it 212 Journal of Economic Perspectives performed the eugenic service ridding the labor force of the “unemployable.” Sidney and Beatrice Webb (1897 [1920], p. 785) put it plainly: “With regard to certain sections of the population [the “unemployable”], this unemployment is not a mark of social disease, but actually of social health.” “[O]f all ways of dealing with these unfortunate parasites,” Sidney Webb (1912, p. 992) opined in the Journal of Political Economy, “the most ruinous to the community is to allow them to unrestrainedly compete as wage earners.” A minimum wage was seen to operate eugenically through two channels: by deterring prospective immigrants (Henderson, 1900) and also by removing from employment the “unemployable,” who, thus identified, could be, for example, segregated in rural communities or sterilized.

The notion that minimum-wage induced disemployment is a social benefit distinguishes its progressive proponents from their neoclassical critics, such as Alfred Marshall (1897), Philip Wicksteed (1913), A. C. Pigou (1913) and John Bates Clark (1913), who regarded job loss as a social cost of minimum wages, not as a putative social benefit (Leonard, 2000).

Columbia’s Henry Rogers Seager, a leading progressive economist who served as president of the AEA in 1922, provides an example. Worthy wage-earners, Seager (1913a, p. 12) argued, need protection from the “wearing competition of the casual worker and the drifter” and from the other “unemployable” who unfairly drag down the wages of more deserving workers (1913b, pp. 82–83). The minimum wage protects deserving workers from the competition of the unfit by making it illegal to work for less. Seager (1913a, p. 9) wrote: “The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.” Seager (p. 10) made clear what should happen to those who, even after remedial training, could not earn the legal minimum: “If we are to maintain a race that is to be made of up of capable, efficient and independent individuals and family groups we must courageously cut off lines of heredity that have been proved to be undesirable by isolation or sterilization . . . .”

  • Richard Harrington

    From each according to his ability, to each according to his need. Society can simply redistribute wealth from the wealthy who don't need it to the people who really do.

  • Jim Collins

    From the people who brought you Eugenics and Planned Parenthood.

  • Tanuki Man

    Rational or rationale?

  • jc collins

    And so Zero Population Growth fell into the trap of their own making.

  • Gil G

    You referring to the "fallacy" of birth control?

  • Gil G

    Namely it only worked when everyone does it but kills you when only you do it?

  • epobirs

    I've been linking this paper on Twitter and other places for a couple of years now but very few are willing to make the effort to read it all the way through.

  • ano333

    That actually contradicts what the quoted article is all about. If keeping "undesirables" from earning wages is a good thing, then how could it also be a good thing to redistribute wealth to them in their need (since they would be unemployed)?

  • ano333

    Just more evidence that everything pretty much sucked in the 19th and early 20th centuries. It's interesting as history, but has no bearing on the present.

  • slocum

    No, there's a parallel. Why are progressives demanding a nationwide $15 hr minimum wage despite enormous differences in the wealth, current average wages, and cost of living between, say, San Francisco and rural Tennessee? Don't they see the damage that this would do in those low-income rural areas? They do, and see it as a benefit. They can't erect trade barriers with red states, but a high national minimum wage would have a similar effect -- namely, to prevent low-cost, right-to-work states from 'stealing' more jobs from progressive, 'blue' areas. They still want to use minimum wages to protect favored workers from competition from 'undesirables' but now those undesirables are southerners in right-to-work states.

  • ano333

    The way I see it, Progressives are just nodding to the fact that state legislatures tend to be dominated by Republicans so a minimum wage increase state-by-state would not work. Thus, why not just take the "easy" road and do it nationally?

    Furthermore, the more liberal cities have been raising their minimum wages higher than the state and national minimums, and I bet Progressives forsee that trend continuing once a new national wage is established.

  • Nehemiah

    Wow, weed out the undesirables from the labor market. Applying eugenic concepts beyond weeding out undesirable people. Neo-Darwinism at work in economic thinking? Who would have thunk it?

  • marque2

    Are you referring to your fallacy of conflating birth control with abortion?

  • marque2


  • http://occamsrazr.com Ike Pigott

    The ugly part of all of this is that Libertarians are sounding the alarm, that minimum wage hurts those who need the work and experience the most... yet the Modern (not classical) Liberal assumes that Libertarians are the ones with the selfish, dog-eat-dog every-man-for-himself outlook.

    A total rhetorical inversion of reality, of which Orwell would be proud.

  • Matthew Slyfield

    " yet the Modern (not classical) Liberal assumes that Libertarians are
    the ones with the selfish, dog-eat-dog every-man-for-himself outlook."

    The modern liberal is right about the Libertarians outlook. Where the modern liberal fails is in understanding that on average, people do better in that environment than in a modern liberal paradise.

    On the other hand, the modern liberal outlook is "one for all (screw that all for one stuff) we all starve together."

  • Special Ed

    I'm not sure of this, so perhaps someone can elucidate on my ignorance. But I believe that in the early 20th century, the term 'Progressive' was actually a republican term. Democrats seized on the title and eventually the 'conservative' and 'progressive' labels ended up being switched. Let's face it, most 'progressive' policies are based on maintaining a status quo and not on 'progressing' on to new and better things, unless those 'things' are the topic du-jour (clean energy, etc).

    As a result "progressive era" is a label that doesn't mean a lot to me. Terms like this change over time. But the time period and policy decisions are interesting despite the labels.

  • http://www.poisonyourmind.com/ nickgb

    Exactly, at least partially. "Progressive" was a very specific term that was embraced by Teddy R and Woodrow alike. It was a brief political and social movement with certain aims, and a small percentage of that group was into eugenics (and let's face it, a lot of Americans were at the time). But to equate "Progressive Era" with modern "progressives" with liberals is just purposefully misleading or absolutely ignorant. Maybe the author here is using minimal commentary to avoid culpability for the deception ("I never said Progressive=progressive!"), but the use of "Early" makes it clear that that's the point.