Walter E. Williams
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An excellent example of how liberals and progressives -- and even some respected economists -- deny the law of demand is their support for increases in the minimum wage. The effect of mandated wage increases is to raise the cost of labor. The entrepreneurial response to higher labor costs is to use less of it by finding substitutes, and examples abound. Back in the 1930s, '40s and '50s, when you pulled into a gasoline station, there was a kid to pump the gas, wipe your windshield and check the oil. Today virtually all gasoline stations are self-serve, and it's not because today's Americans like smelling gas fumes. The minimum wage has destroyed that kind of job. Other responses to higher mandated wages include automation and relocation of production facilities to places with cheaper wages.

Though a few liberals and progressives acknowledge the minimum wage law's negative effects on low-skilled workers, none acknowledges the law's racially discriminatory effects. If an employer must pay a minimum of $7.35 an hour to everyone he hires, the costs to discriminate in the employment of people whom he doesn't like are less. The minimum wage is so effective at promoting racial discrimination in employment that it was a major tool in the arsenal of South Africa's racists during its apartheid era. Racist unions were the country's major supporters of minimum wages for blacks.

Liberals, progressives and tyrants acknowledge the reality of human nature when it fits their agenda and ignore it when it doesn't.

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Walter E. Williams

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'
 
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