November 25, 2015

Minimum wage history: New Deal required closing immigration to strengthen civic cohesion

An earlier post looked at the history of income tax rates, which rose only after the country became more ethnically homogeneous. The foreign-born part of the population began to steadily decline after a peak around 1910, whereas income tax rates didn't start climbing until ten years later during the '20s, when immigration was closed down. Only with an increasingly similar population would voters support taking on higher income taxes -- they wouldn't be going to some faction or another of a fragmented society.

Something similar happened with the minimum wage, another hot topic nowadays with rising income inequality. Only here the delay was even longer: despite some regional attempts in New England in the 1910s, it wasn't until the early '30s that a national policy was enacted, and even then it was declared unconstitutional a few years later by the Supreme Court. Not until around 1940 did a minimum wage law survive at the national level.

It's also worth noting that just because there's been a minimum wage law since the New Deal era, doesn't mean its value has stayed the same over time. In fact, its value rose during the Great Compression -- ending around 1980 -- and has fallen during the current era of hyper-competitiveness and status-striving. The graph below shows the inflation-adjusted value in the light shade:

Thus, pushing for a higher minimum wage in today's climate of soaring immigration and competitiveness would be putting the cart before the horse. The lesson from history is that we first need to kick out the foreigners who don't belong here, close down immigration, and allow the population to grow more homogeneous, trusting, and civically engaged (see the Robert Putnam study on diversity corroding trust). Only once Americans have reversed the "Bowling Alone" mindset and lifestyle will they be more willing to raise the minimum wage.

By the way, this should temper the enthusiasm that some populists on the Trump train have for Ted Cruz being appointed to the Supreme Court under a Trump presidency. He would almost certainly rule like the Lochner Era Justices (roughly 1900-1940), who shot down the first national minimum wage law. Restoring populism is going to require a hell of a lot of support among the Supreme Court, just like it did the last time around, and Cruz is not the man for that job.


  1. That's interesting because, apparently, immigration into the U.S. began declining around the late 2000s, which would imply that rising equality will begin in a few years.

    "The sharp downward trend in net migration from Mexico began about five years ago and has led to the first significant decrease in at least two decades in the unauthorized Mexican population. As of 2011, some 6.1 million unauthorized Mexican immigrants were living in the U.S., down from a peak of nearly 7 million in 2007, according to Pew Hispanic Center estimates based on data from the U.S. Census Bureau. Over the same period, the population of authorized immigrants from Mexico rose modestly, from 5.6 million in 2007 to 5.8 million in 2011."

  2. It's up since then. Also remember that the whole world immigrates here, not just Mexicans. And the percent of the population that is foreign-born hasn't begun to decline either.

    Unifying the population won't happen until Trump gets elected and changes immigration policies.

  3. From:

    "For a long time, Westerners have provided the moral leadership of the world by emphasizing objective principles rather than humanity’s default nepotism and opportunism."

    Well, assuming the worst in others (people are "opportunistic" by "default") is what Boomers specialize in. Believe it or not, Boomers, G.I.s would not have built their grand systems and institutions if they didn't think other people were worth fighting for.

    Gen X-ers are erroneously called the most cynical generation (realistic and humble is more accurate). In fact, it's Boomers who tend to be the most hostile towards others. They consistently oppose measures that obligate civic engagement and constantly bitch about people getting in their way. I don't remember the survey off hand, but it said Boomer were the most heavily against mandatory public service, with Gen X-ers and Millennials nearly equal in their greater support.

    "In a world where Western whites are an increasingly tiny minority, falling from roughly 19 percent of the world’s population in 1950 to perhaps 9 percent today, this divide is dangerous. The internecine status war among the people who built the modern world looks increasingly likely to embolden the rest of the human race to regress into bad old habits, such as racist hatred, religious dogmatism and bellicose tribalism."

    He evidently fears a "regression" to the past, but what has modern individuality wrought? Westerners have heretofore unheard of "rights" to do whatever they damn well please (watch porn, veg out watching serial TV or playing video games, avoid having a family or even a serious relationship, gamble, pop pills/drink booze, applay for disability, etc.) and what has this Silent/Boomer paved road led us to?

    Soaring levels of apathy, narcissism, confusion, depression, perversion, and every other form of corruption.

    The first decade to place the rights of the individual ahead of the good of the community (the 1970's) is also the time when things stopped working. Boomers insist that they recognized and to some degree fought a "bad" system. Yet why then, under their watch, has the system turned into a joke, far inferior to what the Boomers hated in the 60's and 70's?

    If we re implemented the very things that Silents and Boomers sought to destroy (like racial separation, labor unions, high taxes on the wealthy, vice control, etc.) we would remove many of the heavily abused "liberties" (temptations) that have corroded the West since the 70's.

    Of course, you've gotta love the "kids these days" Boomers. How much have their brains been rotted, to not remember that they were the ones who spit on traditional obligations to one's parents, one's religious heritage, one's duty to king and country no matter what. It's always self-serving; "what did you expect, everything sucked in the 70's, what was there to fight for"?

    Too bad the youngest Boomers aren't even 60 yet. We've still got decades of their excuses and toxic me first bitching to look forward to.

  4. I recently watched Dazed and Confused again. Being much older on this repeat viewing, my viewpoint's certainly different. These guys seem cool when you're a teen; when you're well beyond that stage, it really becomes obvious that these Boomers characters have no right to judge anyone or complain about anything.

    The idea that early 60's births are Gen X-ers is absurd; that infamous line about how "the 60's were great, the 70's suck, maybe the 80's will be cool". Ho ho ho, by 1993 we were so ready to trash the Reagan era. 90's Gen X-ers (some of em, anyway) got jealous of the Boomers who didn't have to worry about Aids, the grim realities of sustained drug use, or harsh law and order policies for unruly teens in the 60's and 70's. In the 80's, many people (teens included) aspired to do better, to put effort into being presentable and appealing. Who knew how quickly we'd turn on the 80's.

  5. "In fact, it's Boomers who tend to be the most hostile towards others."

    I was hostile last night, as an Indian guy at Trader Joe's engaged in one of my pet peeves, clogging up the escalator by standing on the left with his wife on the right. I told him most people learn how to curteously ride an escalator by age 13. At this he began following me around the store cracking off face-saving lines, finally settling on telling me that I "look like a janitor." When he folliwed me into the express line, I pointed to my shopping cart and saiid, "Sir, I'm just a humble janitor, can you help?"at which he handed my cashier a twenty, halving my bill.So in this case it was cost effective to be a. hostile boomer.

  6. "It's no wonder his campaign does best with naive college kids desperate to square the circle of worshiping political correctness while returning to the 1950s."

    Well, let's hope there's no cocooning this time. Equality without cocooning would be nice for a change. Would Trump end cocooning?

    A return to the 1950s would be even worse - not only the stifling nature of cocooning, but equality + cocooning creates an environment where dangerous ideologies spread quickly(equality means people trust the government and institutions, but cocooning means they don't trust their neighbors, so will do whatever the politicians say).


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