Uncertainties shadow California plan for nation-leading wage

Workers rally outside the Ronald Reagan State Building in Los Angeles after California's Gov. Jerry Brown signed a bill creating highest statewide minimum wage at $15 an hour by 2022 in Los Angeles, Monday, April 4, 2016. California and New York acted Monday to gradually push their statewide minimum wages to $15 an hour, the highest level in the nation. (AP Photo/Nick Ut)

When California legislators voted to raise the statewide minimum wage to $15 per hour by 2022, labor activists cheered. Discounting fears that a $15 minimum might cost some low-wage workers their jobs, activists and their political allies celebrated a victory for fairness and economic justice.

Progressive labor activists took a very different view 100 years ago, when 15 states established America’s first minimum wages. Labor reformers then believed that a legal minimum would hand a raise to deserving white Anglo-Saxon men, and a pink slip to their undeserving competitors: “racially undesirable” immigrants, the mentally and physically disabled, and women. The original progressives hailed minimum-wage-caused job losses among these groups as a positive benefit to the U.S. economy and to Anglo-Saxon racial integrity.

In 1910, 22 percent of the U.S. workforce was foreign-born. A Who’s Who of American economic reform warned that immigration was leading to “race suicide.” This theory claimed that because non-Anglo-Saxon immigrants had low living standards, their competition in the labor market undercut the wages of the American workingman. Woodrow Wilson, echoing many others, said that Chinese immigrants could “live upon a handful of rice for a pittance.”

The American-born worker, who refused to lower his family’s living standard to the immigrant’s level, opted instead to have fewer children. Thus, concluded the theory, the inferior races would outbreed and displace their white Anglo-Saxon betters.

Progressive economists proposed a minimum wage as the ideal remedy. It lifted up the deserving while excluding the unworthy and did both in the name of progress. Journalist and progressive social reformer Paul Kellogg in 1913 advocated a minimum wage of $3 per day for all immigrants, double the $1.50 per day ordinary laborers were then paid. Kellogg knew that no firm would hire an unskilled immigrant for $3 per day. That was the purpose of his high minimum wage, as he wrote, to exclude “Angelo Lucca and Alexis Spivak” from American shores, thus protecting American jobs for “John Smith and Michael Murphy and Carl Sneider.”

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Kellogg targeted “racially undesirable” immigrants, but a high minimum wage would also protect the American workingman from unworthy economic competition already in the American workforce. The developmentally disabled, then called “feeble minded” or “defective,” also were treated by many labor reformers as low-wage threats. Unable to command a minimum wage, they too would be pushed into unemployment and then could be removed to institutions or to labor colonies.

In the case of women, the minimum wage argument was subtler than the hysteria directed at immigrants and the disabled. Rather, it was couched in the paternalism of protecting women’s health and virtue. In reality, labor reformers wanted to protect employment from women as much as they wanted to protect women from employment.

Labor reformers have far more inclusive views these days. Unlike their namesakes, 21st century progressives consider job losses a social cost, not a putative social benefit.

Today’s progressives would say their namesakes were wrong on race and gender — and wrong on the effects of the minimum wage on employment.

The original progressives were indeed wrong — reprehensibly so — on race and gender. But were they wrong that a minimum wage set high enough will cost low-wage workers their jobs? If a $15 per hour minimum by 2022 proves to be too high too fast, the workers who will lose their jobs will disproportionately be people of color, immigrants, the disabled and women — the very people labor reformers vilified as low wage threats a century ago.

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Thomas C. Leonard teaches economics and history at Princeton. He is the author of “Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era.”