FREE TO CHOOSE “Who protects the worker?” Video and Transcript Part 6 of 7 “The source of the prosperity of this country was freedom of enterprise, freedom of employers to hire, of workers to work for whom they wanted to; and insofar as unions have played a role, they have protected some workers at the expense of others, and have retarded the prosperity of this country”

FREE TO CHOOSE “Who protects the worker?” Video and Transcript Part 6 of 7

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market. Milton Friedman shows in this episode how the worker is best protected and it is not by the government!!!!!!!

The best point made in this part of the debate in this episode of “Free to Choose” was made by the economist Walter Williams when he stated:

“Yes. Okay, well, at least form the standpoint of teenagers, particularly minority teenagers, the minimum wage law has acted to destroy a number of employment opportunities. For example, back in 1948, the black youth between 16 and 18 had an unemployment rate of 9.4 percent and white youth was 10.4 percent or 10.2 percent. The labor force participation rates of blacks was considerably higher than that of whites. And with each increase in the minimum wage law, we had the dramatic reversal that we have now. And so the minimum wage law has the effect of saying that if you cannot produce $2.90 worth of goods an hour, you don’t deserve a job….The point is, is that, I think that both these gentlemen, we all should recognize is that unions in the United States support the minimum wage. They are the major supporters. They spend millions and millions of dollars in lobbying for the minimum wage law. They do it out of the name of concern and being in the interest of people. Now, in South Africa the unions are far more honest. That is those white racist unions over there they say we support minimum wages and equal pay for equal work so as to protect white jobs. That is to protect white jobs__”

Pt 6

MCKENZIE: Let’s raise the question, which certainly is dealt with in the film: have minimum wages __ which is a form of government intervention __ served the interests of the poor and indeed of the working class generally? Now I know you’ve spent a good deal of time looking at this __

W. WILLIAMS: Yes. Okay, well, at least form the standpoint of teenagers, particularly minority teenagers, the minimum wage law has acted to destroy a number of employment opportunities. For example, back in 1948, the black youth between 16 and 18 had an unemployment rate of 9.4 percent and white youth was 10.4 percent or 10.2 percent. The labor force participation rates of blacks was considerably higher than that of whites. And with each increase in the minimum wage law, we had the dramatic reversal that we have now. And so the minimum wage law has the effect of saying that if you cannot produce $2.90 worth of goods an hour, you don’t deserve a job.

GREEN: I don’t think __ you can’t look just at the minimum wages __

W. WILLIAMS: But __

GREEN: __ you’ve got to look at the relocation of firms. You’ve got to __ you’ve got to look at the movement of people. You’ve __ I mean you can’t __ you can’t do that.

W. WILLIAMS: Well, can’t we just __ well you look at the relocation of firms. A lot of people try to say a lot of jobs move out to the suburbs. Well, you find black an white unemployment ratios the same in the suburbs as you find in the cities. So it’s __ I mean, it’s the minimum wages.

L. WILLIAMS: Yes, but taking one element __ you’re taking one element out of a long historic development and you start comparing 1920 __

GREEN: Even if you hold constant __ if you hold constant __

(Several people talking at once.)

MCKENZIE: Lynn is next, Lynn and then Ernest Green. Come on now.

GREEN: I understand the law of educational achievement.

MCKENZIE: Lynn and then Ernest Green.

GREEN: You get a differential between black and white unemployment rates __

MCKENZIE: I’ll bang the gavel. Come on. Lynn.

L. WILLIAMS: Well you’re taking __ you’re taking one element, years ago in a situation that’s entirely different that we’re in today and drawing some conclusions__

W. WILLIAMS: Minimum wage. That’s what’s different.

L. WILLIAMS: No, no. There are many other things that are different. The enormous movement of black people in this country between 1948 and now. You can’t just wipe that out. And you can’t say that’s __

W. WILLIAMS: White people move too.

L. WILLIAMS: __ you certainly can’t say that’s the minimum wage. But you know __

MCKENZIE: Wait now. I want this case made. Has the minimum wage served the interests of the working people in this country?

L. WILLIAMS: I don’t think there’s any question __ I don’t think there’s any question that the working people of this country would be much worse off than they are today, the youth of this country would be much worse off than they are today if we didn’t have minimum wage.

MCKENZIE: All right, now, Bill Brady. You __ come on.

BRADY: No, it’s I __

MCKENZIE: On minimum wages __ good idea or not? You’re an industrialist.

BRADY: No. It’s a bad idea. It is patently one of the, one of the worst things that can __ that we can do to our youth. We prevent them from __

GREEN: Bill, how many kids do you have?

BRADY: __ we prevent __what’s that?

GREEN: How many kids do you have?

BRADY: I have two.

VOICE OFF SCREEN: It’s not important how many kids you have.

GREEN: But it is. Minimum wage doesn’t affect his industry. His wages are far above the minimum wage.

FRIEDMAN: Minimum wage doesn’t affect a single one of his members.

(Several people talking at once.)

MCKENZIE: Hold it. Hold it. Hold it. Milton has the floor.

L. WILLIAMS: We have not gone to support minimum wage legislation in this country __

MCKENZIE: Gentlemen, hold it a moment.

L. WILLIAMS: __ simply to look after our own interests in something as you describe.

MCKENZIE: Hold it a moment.

(Several people talking at once.)

MCKENZIE: Hold it a moment now. Milton __

L. WILLIAMS: Of course we have not. We are a people’s organization __

MCKENZIE: Lynn __ the Chairman has said the floor is Milton’s.

FRIEDMAN: I was saying that there is not a single one, I suspect, of the members of your union who is affected by the minimum wage. They are much higher.

L. WILLIAMS: As a matter of fact that is a deduction.

FRIEDMAN: You say that you are a public service organization.

L. WILLIAMS: I say we’re a people’s organization.

FRIEDMAN: You’re an organization of your workers. And if you aren’t representing the interests of your workers they ought to fire you.

L. WILLIAMS: And we’re out __

FRIEDMAN: If you tell us that you are going against the interests of your workers and you are simultaneously saying to your workers __ I’m not doing what you hired me for.

L. WILLIAMS: Oh, come on. This is, this is pure sophistry. I’m not __

FRIEDMAN: It’s not sophistry in the slightest.

L. WILLIAMS: __ I am not talking __

FRIEDMAN: I’m just trying to __

L. WILLIAMS: I am not talking about representing the interests of our workers. Our union represents a lot of people.

FRIEDMAN: Right. Right. It does.

L. WILLIAMS: And some of the people are the ones that you’re probably aware of, the people who work in big steel mills __

FRIEDMAN: That’s right.

L. WILLIAMS: __ and all the rest of that.

FRIEDMAN: Absolutely.

L. WILLIAMS: But we also go out and organize workers all the time and win certification votes despite Bill Brady’s comment about that and many of the workers we organize are workers who are affected by minimum wage. And the result of our organizing them is that we’re able to bring them above the minimum wage.

MCKENZIE: Yes.

W. WILLIAMS: The point is, is that, I think that both these gentlemen, we all should recognize is that unions in the United States support the minimum wage. They are the major supporters. They spend millions and millions of dollars in lobbying for the minimum wage law. They do it out of the name of concern and being in the interest of people. Now, in South Africa the unions are far more honest. That is those white racist unions over there they say we support minimum wages and equal pay for equal work so as to protect white jobs. That is to protect white jobs__

L. WILLIAMS: Are you implying __

W. WILLIAMS: __ from low price competition.

L. WILLIAMS: Are you now implying, wait, that we’re white racists?

W. WILLIAMS: No, I’m not saying that. I’m saying that it doesn’t make any difference about the intent. The effects are __ the effects are __

GREEN: Walter, the Urban League supports minimum wage the __ Ben Hooks at NAACP supports minimum wage.

MCKENZIE: The floor belongs to Ernest.

W. WILLIAMS: They have very good reasons to support minimum wage.

GREEN: Why?

W. WILLIAMS: Their group that they represent __

GREEN: Why __

W. WILLIAMS: They represent middle class blacks.

GREEN: No, no, no.

W. WILLIAMS: They don’t represent the poor blacks on the streets.

GREEN: The membership of the NAACP probably has as many __

W. WILLIAMS: And they’re owned by them. They’re owned by the AFL-CIO.

L. WILLIAMS: They aren’t owned by the AFL-CIO.

MCKENZIE: Order. Order.

L. WILLIAMS: That is a conservative’s view __

MCKENZIE: Order. Order.

L. WILLIAMS: That is a conservative’s view __

(Several people talking at once.)

MCKENZIE: Order! I’m going to __ I’m going to __ I’m going to __ I’m going to turn to Milton now. Are you saying, then, that you would advocate the repeal of minimum wage legislation?

FRIEDMAN: Of course.

MCKENZIE: You would.

FRIEDMAN: Of course I would.

MCKENZIE: Bill Brady, Bill Brady.

BRADY: I should like to ask Ernest and Lynn why they want to restrict a minimum price to labor. Why don’t you let me have a minimum price on the products that we manufacture?

L. WILLIAMS: Well we aren’t hare, as I understand it, to discuss your problems at the moment in terms of the owners __

BRADY: Is there a difference why a minimum amount of profit ___

L. WILLIAMS: Well, you’re the people I assume who are so anxious to have the free market system and to compete with each other and all the rest of it, we’re talking about the needs of the workers and we’re talking about the needs of the people who come into a society which isn’t providing enough employment for them; which clearly doesn’t seem to be able to provide enough employment for them and what are we going to do? And I think this notion that somehow if we just let every guy who is running a hamburg stand or whatever, we just let all these people exploit the young people of this nation in any way they chose, pay them any little rate they could get away with, that everybody would then go to work, would everybody then have a job, is absolute nonsense.

MCKENZIE: I want to bring Milton to one of the final stages of his film, which is Spartanburg, South Carolina.

FRIEDMAN: Sure.

MCKENZIE: And I want to know what your __ what conclusion you’re drawing from that. Would you, in effect, like to see the whole of the United States become as it were, Spartanburg writ large?

FRIEDMAN: Absolutely.

MCKENZIE: Yeah. What would that mean? And then we’ll get their reaction to it.

FRIEDMAN: It would mean a widening of the opportunity for everybody. It would mean an opportunity for employers all over to compete with one another for workers. It would mean an opportunity for workers to find jobs which can make the greatest use of their own skills and their own capacities. It would mean that consumers would be able to get better products at lower prices. You know, consumers enter into this situation, too. You might think that somehow or other, you know __one of the things that’s always a mystery to me, if a $2.90 minimum wage benefits people why wouldn’t a $6 minimum wage be better? Wouldn’t a $10 minimum wage be better? Why don’t these people come out for a $200 figure minimum wage? If all you had to do to make a country __

VOICE OFF SCREEN: You’re pretty smart __

FRIEDMAN: Two hundred dollars an hour.

W. WILLIAMS: Or extend it to babysitters.

FRIEDMAN: Yeah. If all you need to improve the lot and the conditions of people is to legislate a higher __

MCKENZIE: You’re back on minimum wages. I want to know how Spartanburg __

FRIEDMAN: All right. Spartanburg improves matters because it introduces a wider range of competition and the real thing that protects the worker is the existence of alternative employers seeking his services, just as what protects the consumer is alternative sellers.

BRADY: Milton, you omit one thing that it would do. And it would result in a very substantial increase in capital investment.

FRIEDMAN: Absolutely. It would.

BRADY: And capital is the worker’s second best friend.

____________________________________

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