“Want a job at the Pig?” asked my best friend Steve.
By my reaction, you would have thought he’d asked if I wanted a date with Kathy Ireland rather than inquiring about a job as a grocery sacker at the Piggly Wiggly. But I was living at Steve’s parent’s house rent-free, and needed to earn some money. And in Clarksville, Texas in 1985, the prospects of an inexperienced teen finding a good job were only slightly better than chances of dating a supermodel.
The elation was short-lived, though, and lasted only until I saw my first paycheck. As a full-time student working for a job that qualified for tips (I never, ever got tips) my employer was allowed to pay me the subminimum wage of $2.85 a hour (the equivalent of $5.87 in 2012). After FICA and Social Security took their cut, there wasn’t much left for me.
So if Ronald Reagan had announced in his State of the Union address that he was raising the minimum wage to $4.37 an hour (the equivalent in 1986 of Obama’s $9 minimum wage) I would have been ecstatic. Like all my fellow proletarian coworkers I was disdainful of Reagan’s economic policies, particularly his refusal to raise the minimum wage. Reagan’s was the only administration not to have raised the minimum wage since it was introduced nationally in 1938—a fact we often repeated in the breakroom as we looked at our paystubs and cussed the president.
Twenty-seven years later, though, I see the situation differently. I realize that I have not only my friend Steve but also President Reagan to thank for my getting hired at the Piggly Wiggly. Had the minimum wage been raised, the store owner could have never afforded to hire me. Since my labor was barely worth $2.85 an hour, having a government imposed price increase on wages of 52% would have priced me out of the market.
As William Graham Sumner explained in 1883, by attempting to do me a favor—by artificially raising the minimum wage I must be paid—the politicians were hurting both me and my potential employer:
The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man.
For once let us look him up and consider his case, for the characteristic of all social doctors is that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble; they do not understand that all the parts of society hold together, and that forces which are set in action act and react throughout the whole organism, until an equilibrium is produced by a readjustment of all interests and rights.
They therefore ignore entirely the source from which they must draw all the energy which they employ in their remedies, and they ignore all the effects on other members of society than the ones they have in view. They are always under the dominion of the superstition of government, and, forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion — that the state cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.
By raising the minimum wage, Reagan would have made the owner of the Piggly Wiggly the “Forgotten Man.” But I would have become a Forgotten Man too. While it’s relatively easy to see and hear a merchant who complains about not being able to afford young workers, the ones without a job are silent and invisible. It’s impossible to truly quantify the job offers that never come because no one can afford to hire a low-skilled, low-productivity worker.
Like many young workers today, I would have cheerfully praised the President for implementing a policy that would keep me unemployed. At the time I didn’t understand economic concepts like marginal utility and supply and demand. I didn’t realize then that raising the minimum wage increases the wages of the few at the expense of the many. I didn’t know that I wasn’t going to get a better paying job, I was just becoming another Forgotten Man.