Thomas C/ Leonard
Retrospectives Eugenics and Economics in the Progressive Era 

The Eugenic Effects of Minimum Wage Laws

During  the  second  half  of the  Progressive  Era,  beginning roughly  in  1908, progressive  economists and  their  reform  allies achieved  many  statutory  victories, including state  laws that  regulated working  conditions, banned child  labor,  insti- tuted   “mothers’   pensions,”   capped working  hours   and,  the  sine qua non,  fixed minimum wages. In using eugenics  to justify exclusionary immigration legislation, the race-suicide  theorists offered  a model  to economists advocating labor  reforms, notably  those  affiliated  with the  American  Association  for Labor  Legislation,  the organization of academic economists that  Orloff  and  Skocpol  (1984,  p. 726)  call the  “leading  association  of U.S. social reform  advocates  in the  Progressive  Era.”

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

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  unre- strainedly  compete as wage earners.” A minimum wage was seen to operate eugen- ically 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 . . . .”

The  unemployable were thus  those  workers who earned less than  some  mea- sure  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 rhetor- ically, “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.”5

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,   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.6

But how should  a living wage be determined? Were workers with more  depen- dents,  and  thus higher living expenses, thereby  entitled to higher wages? Arguing that wages should  be a 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.”7  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.

In his Races and Immigrants, the  University of Wisconsin economist and  social reformer John  R. Commons argued that  wage competition not  only lowers wages, it also selects for the unfit  races. “The competition has no respect  for the superior races,”  said Commons (1907,  p. 151),  “the  race  with lowest necessities  displaces others.”  Because  race  rather than  productivity  determined living standards,  Com- mons  could  populate his  low-wage-races category  with  the  industrious and  lazy alike. African Americans  were, for Commons (p. 136), “indolent and fickle,” which explained why, Commons argued, slavery was required: “The  negro   could  not possibly have found a place  in American  industry  had  he come  as a free man  . . . [I ]f such races are to adopt  that industrious life which is second  nature to races of the  temperate zones,  it  is only  through some  form  of  compulsion.”   Similarly, Wharton School  reformer Scott  Nearing (1915,  p.  22),  volunteered that  if “an employer has a Scotchman working for him at $3 a day [and] an equally efficient Lithuanian offers to the same work for $2 . . . the work is given to the low bidder.” When  U.S. labor  reformers reported on  labor  legislation  in  countries more precocious with respect  to labor reform, they favorably commented on the eugenic efficacy of minimum wages in excluding the “low-wage races” from work. Harvard’s Arthur  Holcombe (1912,  p. 21), a member of the  Massachusetts  Minimum  Wage Commission, referred approvingly  to the intent of Australia’s minimum wage law to “protect the white Australian’s standard of living from the invidious competition  of the  colored races,  particularly of the  Chinese.”  Florence Kelley (1911,  p.  304), perhaps the  most  influential U.S. labor  reformer of the  day, also endorsed the Australian  minimum-wage law as “redeeming the sweated trades” by preventing the “unbridled competition” of the unemployable, the “women, children, and Chinese [who]  were reducing all the  employees  to starvation  . . .”

For these  progressives,  race  determined the  standard of living, and  the  stan- dard  of living determined the  wage. Thus  were immigration restriction and  labor legislation, especially minimum wages, justified for their  eugenic effects. Invidious distinction, whether founded on the putatively greater fertility of the unfit, or upon their  putatively greater predisposition to low wages, lay at the heart  of the reforms we today see as the  hallmark of the  Progressive  Era.

Also see:
The Horrifying Truth About American Eugenics
http://www.corbettreport.com/interview-917-truth-over-comfort-the-truth-about-american-eugenics/