Solution to Unemployment Found: Kill the Unemployed
That was the solution proffered by eugenicist progressives during the 1920s and 1930s. At least, that was their preferred option. Frank Taussig admitted that we “have not reached the stage where we can proceed to chloroform [the unemployed] once and for all, but at least they can be segregated, shut up in refuges and asylums, and prevented from propagating their kind.”
Many leftists today deny that minimum wage laws increase unemployment among the least skilled and most disadvantaged workers. Among many early progressive, however, it was fully admitted that minimum wages cause unemployment, and this fact was to be used to effect good eugenicist social policy. In “Eugenics and Economics in the Progressive Era” in The Journal of Economic Perspectives by Thomas C. Leonard, Leonard examines how the minimum wage was used to separate the “worthy” workers (i.e., those who could earn a “living wage”) from those unproductive workers who should be sterilized.
From Leonard’s analysis, we learn several things:
1. It was assumed and fully admitted by progressives that a minimum wage would cause unemployment among the least-skilled workers in society.
2. For the eugenicists, the resulting unemployment was a good thing because it allowed the “experts” to more easily cull those who were worthy of being allowed to continue to exist and reproduce, from those who were not.
3. Such arguments for the minimum wage were also closely related to the racism inherent in early minimum wage arguments, which is covered in more detail here.
Leonard explores the assumed benefits of unemployment caused by minimum wages here:
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 . . . .”
The unemployable were thus those workers who earned less than some measure of an adequate standard of living, a standard the British called a “decent maintenance” and Americans referred to as a “living wage.” For labor reformers, firms that paid workers less than the living wage to which they were entitled were deemed parasitic, as were the workers who accepted such wages—on grounds that someone (charity, state, other members of the household) would need to make up the difference. For progressives, a legal minimum wage had the useful property of sorting the unfit, who would lose their jobs, from the deserving workers, who would retain their jobs. Royal Meeker, a Princeton economist who served as Woodrow Wilson’s U.S. Commissioner of Labor, opposed a proposal to subsidize the wages of poor workers for this reason. Meeker preferred a wage floor because it would disemploy unfit workers and thereby enable their culling from the work force. “It is much better to enact a minimum-wage law even if it deprives these unfortunates of work,” argued Meeker (1910, p. 554). “Better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind.” A. B. Wolfe (1917, p. 278) an American progressive economist who would later become president of the AEA in 1943, also argued for the eugenic virtues of removing from employment those who “are a burden on society.”
In his Principles of Economics, Frank Taussig (1921, pp. 332–333) asked rhetorically, “how to deal with the unemployable?” Taussig identified two classes of unemployable worker, distinguishing the aged, infirm and disabled from the “feebleminded . . . those saturated with alcohol or tainted with hereditary disease . . . [and] the irretrievable criminals and tramps. . . .” The latter class, Taussig proposed, “should simply be stamped out.” “We have not reached the stage,” Taussig allowed, “where we can proceed to chloroform them once and for all; but at least they can be segregated, shut up in refuges and asylums, and prevented from
propagating their kind.”
The progressive idea that the unemployable could not earn a living wage was bound up with the progressive view of wage determination. Unlike the economists who pioneered the still-novel marginal productivity theory [i.e., Austrian economists -ed.], most progressives agreed that wages should be determined by the amount that was necessary to provide a reasonable standard of living, not by productivity, and that the cost of this entitlement should fall on firms.
But how should a living wage be determined? Were workers with more dependents, and thus higher living expenses, thereby entitled to higher wages? Arguing that wages should be matter of an appropriate standard of living opened the door, in this era of eugenics, to theories of wage determination that were grounded in biology, in particular to the idea that “low-wage races” were biologically predisposed to low wages, or “under-living.” Edward A. Ross (1936, p. 70), the proponent of race-suicide theory, argued that “the Coolie cannot outdo the American, but he can underlive him.” “Native” workers have higher productivity, claimed Ross, but because Chinese immigrants are racially disposed to work for lower wages, they displace the native workers.