The History and Evolution of the EMU and its Impact on Globalization

Abstract

Throughout the last century European officials have been attempting to duplicate the economic prosperity found in the United States, which has been attributed to America’s successful monetary union. From the end of World War II till today economic unification has been steadily advancing, from limited trade partnerships to the current Economic and Monetary Union (EMU) of the European Union, with its crowning achievement: the currency union, known as the euro area. While the EMU is a powerful economic force, the inherent imbalances in fiscal policies at the national level had been exposed during the recent euro crisis, leading to the conclusion that the union needs to either take more steps toward centralizing economic policy; or begin to disintegrate the union, in whole or in part. A review of the existing literature will show that the preferable solution is radically less integration, including the possible disintegration of the entire euro area and a return to national currencies.

The Economic and Monetary Union (EMU) of the European Union is the largest such union in the world. It encompasses all 28 member states of the European Union regardless of whether they have adopted the euro as currency. The EMU is the end product of a century of modest steps toward unification of the EU economies, whose sheer numbers are impressive with more than 500 million people and a combined GDP larger than that of any nation on earth. The EMU and its single currency area are undoubtedly major advancements in globalization, but the heightened prosperity comes at a price. The amalgamation of so many disparate economies threatens to dissolve long-standing democratic institutions and perhaps the very concept of the nation-state itself.

WHAT IS E.M.U.?

EMU is the economic pact that all member states of the EU must abide by. Even the nine EU countries that continue to use their own national currency and are therefore not part of the Eurozone (officially known as the euro area) are fully part of the EMU, which is defined by three primary elements. The first is customs union—an international tariff-free zone with a common external tariff—and single market, meaning virtually all restrictions on internal trade have been removed. These two arrangements can be realized without political realignment, but the third and most important plank of the EMU (while still optional for EU countries) is monetary union—the sharing of an international currency—and this cannot be sustained without radical changes to existing political systems.

Noticeably absent in the EMU and the euro area is a centralized fiscal policy or common treasury (Selvaraj 2015, p. 20), both of which are needed to prevent imbalances in the common currency. Without those two critical institutions the monetary union could disintegrate or degenerate into a permanent vehicle for transferring wealth from the stable economies to the ones that need relief. If the EU goes ahead with its plans to create its own Eurozone treasury—which would invariably lead to a centralized fiscal policy—that could mean the end of nearly 400 years of traditional Westphalian nationhood in Europe. Legitimate concerns over the loss of national sovereignty have made the institutionalization of the euro—a single currency regulated by a single central bank—the most controversial aspect of EMU. The intricacies of the monetary union will therefore be the primary focus of this report.

MONETARY UNIONS PRIOR TO THE E.M.U.

The modern concept of economic integration could be said to have begun with the former British colonies in America, whose history of assimilation is remarkably similar to that of the EU and will be explored in detail later. There have been several other attempts at monetary union in one form or another in the last two centuries but none was of comparable size or scope to the US or the EMU. Beginning in the 1870s, the Scandinavian countries experimented with a mutual exchange rate tied to gold but the agreement was merely intended to be a pact between neighbors and not an expansionary scheme like the EMU (Tache 2013, p. 167). The ill-fated Hapsburg Empire produced a relatively successful currency union from 1878 through World War I but disintegrated after the resurgence of national currencies in the 1920s (Gross & Gummer 2014, p. 252). The most intriguing case study for the EMU has to be the Latin Monetary Union, an organic arrangement formed in 1865 between France, Belgium, Italy, and Switzerland (Tache 2013, p. 166). Prophetically, the LMU was put in jeopardy after Greece—a fiscally toxic nation even back then—joined in 1867 over objections that this would pollute the other economies in the union. Despite this, the strongest LMU nation, France, got wide-eyed about what it perceived to be an opportunity to increase its currency area and therefore its wealth (Tache 2013, p. 166). The LMU eventually comprised eighteen nations but had neither a central bank nor a single currency, so it eventually succumbed to the inflationary pressures caused by currency devaluation and the massive expenditures of World War I (Tache 2013, pp. 166-167). Interestingly, fear of hyperinflation was a reason for starting, not ending, the somewhat successful Benelux Union, which actually predated and overlapped some of the primitive predecessors of the EMU.     

EARLY ATTEMPTS AT UNIFYING EUROPE

The idea of integrating the continent had been around for ages, but it took the devastation of two World Wars and everything that accompanied them for European leaders to talk seriously about exploring the possibility of unification (Marshall 2012, p. 16). Preliminary plans for economic union had broad appeal. In 1945, Churchill reportedly encouraged the nations of Europe to emulate the American example of unification to promote, among other virtues, “economic cooperation” (Mauter 1998, p. 67). Significant figures in the government of the United States, motivated by a desire to prevent war and thus avoid future costly interventions in Europe, shared the same federalist vision (Gavin 2010, p. 35). In 1948 European luminaries of every stripe attended the Congress of Europe and produced a proposal for a unified continent with its own parliament (Marshall 2012, p. 16). In 1950 French premier René Pleven’s proposal for military union ultimately went nowhere, but in that same year his foreign minister Robert Schuman proposed the creation of the seminal European Coal and Steel Community (ECSC), which became the first step on the road to the modern EMU.

THE ROAD TO E.M.U.

The ECSC began in 1952 with only France, Belgium, Italy, West Germany, Luxembourg, and the Netherlands, but the idea of further economic integration was already gaining steam. In 1957 the same six countries signed the Treaty of Rome that established the European Economic Community (EEC), which later became the European Union.

The unofficially connected monetary system of the EEC enjoyed relative stability until the world’s currency markets became unhinged in the late 1960s. In 1970, the Werner Report was the first expression of the nations of Europe to establish an official monetary union (Fichtner & König 2015, p. 376). The Werner Report outlined three stages in the ten-year plan to realize EMU by the year 1980. Unfortunately, the gold standard—which is itself a type of monetary union (Tache 2013, p. 162)—was thrown out in 1971 and this unleashed a global pandemic of currency destabilization which, combined with the energy shocks of the 1970s, made the idea of monetary union less attractive (Fichtner & König 2015, p. 377).

The next decade nevertheless saw major advancements toward European economic unification. In 1979 the European Monetary System (EMS) was created to keep exchange rate volatility within certain limits (Fichtner & König 2015, p. 377). By 1986, the single market had been established (Fichtner & König 2015, p. 377). In 1988, European central bankers and European Commission President Jacques Delors finalized yet another three-stage plan for economic and monetary union known as the Delors Report (Fichtner & König 2015, p. 376).

 Not everyone was enthusiastic about the idea, however. An ideologically eclectic assemblage of skeptics—led by some prominent politicians and economists such as Margaret Thatcher and Milton Friedman, as well as various media outlets and think tanks in Europe and America—openly doubted the survivability of European monetary union (Perpelea, M., Duţă & Perpelea, O. 2013, p. 139).

THE BEGINNINGS OF E.M.U. AND PREPARATIONS FOR THE EURO

The EMS was retired in 1991 by the Treaty of Maastricht which formally established the EMU. This new economic structure for the EU was to be supervised by a menagerie of the EU member state governments, a handful of EU bureaucracies, and the European Parliament. In keeping with the evolutionary trend, the process was to be accomplished through the stages specified in the Delors Report (Schwartz 1996, p. 30).

The first stage (1991-1994) involved completing the single market through the removal of internal barriers to the flow of capital. The second stage (1994-1999) set up the European Central Bank (ECB) and the European System of Central Banks (ESCB) to co-ordinate central banking at the national level (Schwartz 1996, p. 30). Note that all EU members’ national central banks are part of the ESCB, but only the ones from euro area nations comprise—in conjunction with the ECB—the Eurosystem that is tasked with regulating the euro.

The ECB has a notably high degree of independence. An elite Governing Council of the ECB, composed of high officials from the Eurosystem, has control over monetary policy for the entire euro area. The edicts from the Governing Council are expected to filter down to the non-euro countries through the ESCB. The third and final stage (1999 and after) sought to fix exchange rates and begin the era of the euro. Additionally, an informal body known as the Eurogroup, composed of administrators from the euro area member states, holds regular meetings to discuss and co-ordinate policies affecting the euro.

            Maastricht also spelled out the convergence criteria for countries that want to enter the monetary union: a deficit-to-GDP ratio of no more than 3% and a debt-to-GDP ratio of no more than 60%, along with fairly stable rates of exchange, interest, and inflation (Schwartz 1996, p. 30). In 1997 the Stability and Growth Pact intended to enforce good fiscal behavior in potential euro area member nations, as well as create new exchange-rate guidelines for those in the second stage (ERM II) of the transition process to the euro.

Eleven countries comprised the euro area at the start (said to have reached the third and final stage of EMU) and seven more were added from 2001-2015, beginning with Greece. The fateful decision to let Greece into the euro area would have profound repercussions for the monetary union.  

THE CURRENT E.M.U. AND THE EUROZONE

While there is no way to determine if the EMU is anything more than the sum of its parts, it is collectively a global powerhouse. The EMU has been a success at facilitating free trade within the member states and perhaps outside of them—a dynamic that not only increases prosperity but also decreases the likelihood of conflict (Alves 2011, p. 51). The EU nations have experienced a refreshing era of peace—at least in terms of major military actions between member nations—but just how much of this is because of EMU is uncertain.

In the early days of the euro area, the idea of pegging some African currencies to the euro was already being entertained, as was the notion of forming other monetary unions in Southeast Asia, Latin America, or North America (Mundell 2000, p. 225). Even the idea of a global monetary union had a degree of support (Mundell 2000, pp. 255-256),  but a worldwide single currency is not feasible. There would be no benchmarks to compare it with, so it could never be corrected except by inflating it or manipulating it monetarily (Mundell 2000, p. 231). Nevertheless, the plausibility of other potential projects in monetary union, and globalization in general, would hinge on the performance of the European monetary union.           

THE PROBLEMS OF GLOBALIZATION

Problems with the EMU were apparent—or should have been—from the very beginning. The conventional economic mentality that guided the EMU’s key institutions, namely, the European Commission and the ECB, rendered them inadequate to govern such an unconventional project so the system was destined to grow out of control (Flassbeck & Spiecker 2011, p. 180). There is evidence to support the claim that the architects of the EMU were willing to accept economic crises and social strife as part of their experiment because they believed these maladies could make further unification appear desirable (Fichtner & König 2015, p. 376). On the contrary, some of the euro area governments have taken advantage of the deficiencies of the euro to advance their own selfish ambitions at the expense of the other member states, while the impotent EU institutions find themselves unable to do anything meaningful about the lack of co-operation (Orphaides 2014, p. 262).

            The hope was that the monetary union would serve as a vehicle to transmit salubrious economic practices throughout all of its member states, but instead it became a way for the less responsible economies to free-ride on their more circumspect neighbors (Alves 2011, p. 48). Because of its institutional structure, the euro area can serve as an enabler for the member states obsessed with the counterproductive economic habits of profligate spending and heavy regulation, because there is an expectation that the debt incurred as a consequence of these policies will be shifted to the rest of the monetary union (Alves 2011, p. 50). Not only are the bad fiscal policies of the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) countries offset by the protections afforded by the single currency, they are actually incentivized (Alves 2011, p. 47). It did not take long for a severe debt crisis to develop.

THE EUROZONE CRISIS

The worldwide panic of 2008 set off a chain of events that ultimately exposed serious underlying structural problems in the monetary union. The root cause of the Eurozone crisis was actually not the currency, but numerous other issues stemming from a pervasive lack of growth and unwieldy public debt (Weber 2015, p. 247), much of which is a direct result of the excessive social welfare spending throughout the EU (Lemieux 2013, p. 227). The currency union comprises strong economies that implement pro-growth measures such as Germany as well as sluggish Southern European economies whose populations nonetheless continue to receive increased nominal wages (Flassbeck & Spiecker 2011, p. 182). There had long been evidence that Greece acted unscrupulously by not disclosing its shaky financial situation in the early 2000s in order to meet the convergence criteria necessary for entrance into the monetary union, but after the crisis it was revealed that Greece also concealed its budget deficit during the financial crisis (İmre 2011, p. 74).

The countries that had already been running huge deficits in a desperate attempt to keep their economies afloat finally sank during the crisis, causing all kinds of financial problems related to public debt that are still unresolved (Fichtner & König 2015, pp. 381-382). With the stronger EMU nations having to bail out the fiscally troubled members of the union such as Greece, Ireland, and Portugal, the inherent imbalances of the flimsy system could no longer be dismissed (İmre 2011, p. 74).

CONSEQUENCES OF THE CRISIS

Throughout the 25 years of its existence, EMU planners have over-relied on manipulating the common currency as a means to achieve further integration and accustom the populations to the inherent disruptions caused by monetarily combining unequally yoked economies (Fichtner & König 2015, p. 383). This has not only led to economic crises, but severe social and political upheaval as citizens rebel against the policies of a system that seems to be perpetually advancing away from the constraints of democracy (Fichtner & König 2015, p. 383). No country has exemplified this outrage more than Greece, whose people—having recently elected a government stridently opposed to the status quo—are strongly considering leaving the euro area (Fichtner & König 2015, p. 383). Conversely, the populations who are shouldering most of the load in the EMU are undoubtedly pressuring their officials toward re-thinking the whole idea of monetary union.

The conventional approach to the European crisis has been to think of it solely in economic terms, but at the core of the crisis is the issue of the viability of the European Union itself (Lehmann 2014, p. 33). The economic crisis has exacerbated a great deal of pre-existent animosity toward the EU that its leaders had been ignoring, but they must now acknowledge the opposition’s frustration and make the needed reforms or risk jeopardizing the plans they have for further integration (Lehmann 2014, p. 33). The currency union that was supposed to unite Europe has instead produced seismic rifts in the EU, and the flaws in the euro are threatening the future of the entire experiment in European unification (Orphaides 2014, p. 262).

POSSIBLE SOLUTIONS

The competitiveness gap between the stronger economies such as Germany that keep wages closer to the market level, and the weaker Southern European economies where wages have experienced artificial inflation, has led some to conclude that the only answer is the EU-wide regulation of wage policy (Flassbeck & Spiecker 2011, 180). To mitigate the consequences of a financial crisis that affects each country differently, one recommendation is to have a centralized insurance framework in place (İmre 2011, p. 74).

The official plan to correct some of the flaws in the EMU has already been outlined. The unending evolution of the EMU is apparently set to continue in at least two more stages. The first stage (2015-2017) consists of using the mechanisms currently in place to better co-ordinate national and system-wide economic policies; and the second stage (to be completed by 2025) is a more aggressive vision that includes the establishment of a single treasury for the euro area.

The creation of a single treasury would have profound implications for the monetary union. This would potentially place all decisions regarding the member nations’ fiscal policies in the hands of EU officials. The Eurozone crisis could lead to the EU taking complete control over economic policy, but unless changes are made to the existing order this could prove disastrous (Alves 2011, p. 51). The euro—and the entire EMU—could be put in serious jeopardy if a fully centralized supergovernment were ever given the power to use the common currency as a tool to reallocate wealth through currency manipulation (Alves 2011, p. 51).

THE FUTURE OF THE E.M.U.

The success or failure of the monetary union is dependent on whether the euro area is an optimal currency union—a collection of territories in which a single currency would maximize economic potential. While the European Commission still believes the Eurozone will eventually become an optimal currency area (İmre 2011, p. 74), this was a question that should have been answered before the monetary union was created. It should be noted that the decision to form the Economic and Monetary Union was entirely voluntary, and support for the idea came almost exclusively from the elites and not the people (Perpelea et al 2013, pp. 137-138). EMU is a solution in search of a problem, and now the biggest problem in Europe is the EMU itself.

The EMU is anomalous in the history of monetary unions because it has heretofore functioned without a binding political arrangement for fiscal decision-making; in nearly every other case, political union has preceded monetary union (Tache 2013, p. 166). The Latin Monetary Union exemplified how monetary unions among large, independent nation-states will fail sooner or later if they do not unify politically (Tache 2013, p. 167).

WHAT WOULD FURTHER INTEGRATION MEAN?

The comparison between the United States and the euro area deserves further evaluation, as both unions are economically alike despite obvious differences in organizational structure (Orphanides 2014, p. 244). The dramatic story of the United States is, at heart, an account of the vicissitudes and perturbations of a monetary union. It should not be assumed that the formation of the United States was inevitable, nor should anyone forget that unification was a long process, not a single event. There had been attempts to unify the colonies going back to Ben Franklin’s Albany Plan of Union in 1754. From the Articles of Association up till the present day, the union continues to evolve in ways that Europe should take note of because not all of the developments have been positive.

Europeans who believe that further integration can be accomplished without giving over national sovereignty to a continental government should know that present-day America is far removed from what the Founders intended to create. The United States was not a nation (and still is not); the United States were thirteen sovereign nations (Young 1977, p. 1572). The people considered themselves citizens of their respective states, as federalism was never intended to eviscerate state (national) sovereignty (Young 1977, p. 1575).

“A MORE PERFECT UNION”

Aside from a disastrous experiment with the Continental currency during the Revolutionary War, the road to the American version of monetary union began in earnest with the Articles of Confederation, which have been unfairly charged with setting up a failed form of union (Young 1977, p. 1975). The Articles gave Congress the power to borrow money, issue currency, and regulate foreign trade (Young 1977, p. 1574). The centralization of monetary policy was furthered by the Constitution, whose framework to create “a more perfect Union” included giving Congress exclusive authority to issue fiat money and regulate its value. It was not until after the Civil War, however, that the federal government took complete control over monetary policy (Tache 2013, p. 164).  Subsequent Progressive Era corruptions of the Constitution such as the Sixteenth and Seventeenth Amendments greatly tilted the balance of power away from the states toward what looks suspiciously like the type of national government the Founders feared would eventually eviscerate the federalist system. More than two centuries of sustained efforts to concentrate more power in the hands of federal officials rendered the state governments an afterthought, just as the procession of Treaties, from Rome to Maastricht to Lisbon, has groomed the heterogeneous peoples of Europe into forsaking their national pride and accepting complete consolidation.

It is not easy to ascertain precisely which stage in the development of the American monetary union most accurately reflects its European counterpart at this moment, or exactly which incarnation of the United States most closely resembles the ideal that the grand designers of the EU are trying to emulate, but the paths the two unions have taken thus far are strikingly similar and the result in both cases is a substantial loss of sovereignty.

THE UNITED STATES OF EUROPE?

Even during the heyday of federalism in the post-World War II years, it is still uncertain just how far Churchill and his peers wanted to go toward European unification, and the evidence suggests the great British leader would never have been in favor of unification if it came at the expense of political sovereignty (Mauter 1998, p. 83).

The idea of monetary union is inherently antithetical to state sovereignty. One of the reasons why the federal government of the US took control of the currency was to disempower rogue states after the Civil War (Tache 2013, p. 164). Coincidentally, one of the goals of the architects of the European monetary union was to prevent wars between the countries (Tache 2013, p. 164), but soon there may be no more countries. It is unlikely that the EU can continue on its current trajectory much longer without federalizing the Eurozone nations under a single government, which, as the American experiment has demonstrated, will eventually result in nationhood. This would obviously be a colossal disruption, as the Eurozone does not have the same natural conduciveness to nationhood that early America had. The former colonies had a population of perhaps 3 million, not 300 million-plus; were bound by a common language and culture, not dozens of these; and their borders were newly minted, not hundreds of years old. Even in those fortuitous circumstances, the greatest assemblage of statesmen the world has ever produced in its history could not reconcile fundamental differences between the states at the time of union, and many of these were economic in nature. There were northern states that had transitioned to a burgeoning form of capitalism and southern states whose economies were still heavily reliant on a system of plantation slavery that would later be called communism, but the Eurozone contains nations that have differences rivaling even these infamous quandaries. Americans from different states have a fraternal bond that makes union possible (Buccola 2014, p. 262), but it will take an extreme effort to get Greeks and Germans—to name just one example of an awkward pairing—to identify as countrymen. Perhaps the Europeans can resolve their economic discrepancies diplomatically, but the consequence for the United States was Civil War, and even that did not resolve all of the internecine disputes.

The most instructive American history lesson for modern Europeans is that homogenization has not solved the kinds of economic imbalances currently afflicting both the United States and the euro area. The debt crises in America and the EU are strikingly similar (Gokhale & Partin 2013, p. 193). Europeans should know that even in the United States, wages and consumer prices are not uniform either, and attempts to federalize wage floors and price ceilings would only further distort local markets. Europe would have an exceedingly difficult time trying to overcome fully federalized economic regulations because the Old World does not have the labor mobility found in the United States. Largely for economic reasons, Americans routinely migrate across state lines, to the tune of approximately 8 million people, or 3% of the population, annually (Perpelea et al 2013, p. 141).

BAIL OUT OR FORCE-OUT?

In the EMU, or any other type of economic union, there is always the inherent problem of risk externalization: The tacit understanding that at least some of the consequences of any one state’s irresponsible fiscal policy will be borne by the other member states (Buccola 2014, p. 262). If a bailout is given to the financially troubled state, this only heightens moral hazard and therefore the likelihood of future reckless spending for all the states in the economic union (Buccola 2014, p. 262). This economic law is more applicable now in the United States than ever before, even though the fiscal policies of the states have been placed in the hands of the federal government to a considerable extent. The largest state in the union—California—and some mid-size ones such as Illinois, Michigan, and New Jersey are riddled with overwhelming public debt to the point where they may never be able to meet their obligations (Buccola 2014, p. 237).

No state has ever been kicked out of the United States and, although some have infamously tried to escape, none successfully has. No EU country has left the euro area thus far, but since reliance on perpetual bailouts is unsustainable there are only two long-term options for the stronger Eurozone nations: either impose radical fiscal restraints on the troubled member states or force them out of the currency union. If neither of these reforms is made, the net givers—the states for whom monetary union is a losing proposition, such as Texas or Germany—may have no choice but to uncouple their economic locomotives from the dead weight they are pulling and leave the currency union. Since the remaining member states in that case would be net takers—the ones that receive more than they give—the result would be a monetary union with no money, which would of course disintegrate.      

THE FUTURE OF GLOBALIZATION

The monetary union in the United States has undoubtedly contributed to the unmatched prosperity of that great nation, but it is not the reason for the success. The font of American prosperity is capitalism, and if Europeans wish to emulate anything about the United States it should be this. The most well-designed economic union in the world will never make up for bad macroeconomic policy, and Americans—who had long taken their free-market blessings for granted—are beginning to learn this the hard way.

Monetary union is the economic application of the old adage that postulates there is safety in numbers. The smaller members in the union believe they can piggyback on the larger economies, and the giants view the smaller states as places where they can impose economic hegemony and advance their own national interests. History has shown that in the long run neither situation is tenable for all parties involved.

Disintegration is not something to be feared. EU member states can rediscover their sovereignty while still having beneficial economic partnerships and retaining many of the advantages they have now. Switzerland and Norway, for example, are not even EU members but are part of its more intelligently designed trade agreements such as the single market.

The future lies not in further globalization but in separation. This will take place either voluntarily or as the result of a monstrous crisis that de-integration might have prevented. The benefits of monetary union in terms of increased efficiency are simply not worth a suicide pact. In both America and Europe, centralized policymaking has led to central planning on a level that Westerners should be uncomfortable with. For these nations, some of which once ranked among the greatest the world had ever known, the solutions will come not from Washington or Brussels, but from within.

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Money for Nothing: The Economic and Political Impact of Living Wage Laws

                                                                 ABSTRACT

 The popularity of the federal minimum wage has spawned ‘living wage’ laws in many urban areas across the United States. These local laws have heretofore mandated mostly modest pay increases and covered relatively few workers, so the economic impact has been minimal. There is, however, a growing trend of activism that threatens to severely damage the business climate by forcing employers to pay what is called a living wage, which could be considered astronomical in some places.

 Aside from their obvious conflict with the sacred American principles of freedom of contracts, as well as freedom from coercion in labor markets, the various empirical problems associated with wage floors in general and the living wage laws in particular will be unveiled: 1) The criteria used for determining a ‘living wage’ are unreliable, as real living wages vary from place to place and from person to person; 2) the only reason the old living wage laws did not severely damage the economy was because they were toothless; 3) the new toothy living wage laws are virtually guaranteed to have serious negative spillover effects; and 4) the living wage movement is part of a dangerous trend of radical activism that has the potential to overpower political leadership in some places.

 MONEY FOR NOTHING: THE ECONOMIC AND POLITICAL IMPACT OF LIVING WAGE LAWS By Cameron

 Minimum wage laws have become an integral part of American political economy, despite their antithetical stance toward the fundamental principles of freedom from coercion in labor markets, and the right to freely enter into contracts. The minimum wage is something of a phenomenon because the vast majority of Americans, regardless of social or ideological differences, esteem the policy as an appropriate use of the state to promote healthy labor relations (1). The popularity of the minimum wage puzzles some economists (2), but since the drain on the economy is miniscule, while the gain for politicians is abundant, the minimum wage is a seemingly endless political gold mine. The crusade for additional legislation to raise the minimum wage in some places to a ‘living wage’ epitomizes Americans’ boundless—and perhaps unhealthy—appetite for state interventionism in wage determination.

                             FROM THE MINIMUM WAGE TO A LIVING WAGE

 The living wage is not the same as the minimum wage (3). The federal minimum wage has been in place since 1938 when it was set at just 25 cents per hour (4), which appears to be very low even when adjusted for inflation. According to Rogers, the first minimum wage law was more about preventing the outright exploitation of vulnerable workers than raising the real wages of breadwinners (5). Ironically, the fact that the minimum wage was never intended to provide subsistence income for heads of households may have actually been a concession to organized labor. Stapleford reports that Samuel Gompers, who was among the earliest agitators for a respectable living wage (6), never called for a government-mandated minimum wage and believed that such a law actually had the potential to hinder the bargaining power of workers (7).

 Times have changed. The modern labor movement, which has lost almost all of its national influence but is still strong in the cities, is firmly in favor of a mandated living wage. Luce reports that labor activists encountered too much opposition when lobbying to raise the federal minimum wage, so they found a niche in liberal urban centers where they could more easily exert pressure on local officials to give in to their demands (8). “Unions, community and faith groups had better chances to mobilize members to visit City Council members and lobby on a regular basis,” writes Luce (9). Under such heavy political pressure concentrated in a small geographical area, urban policymakers caved in.

 Many municipalities now have a living wage policy, and twenty-three states as well as the District of Columbia have minimum wages above the federal level as of August 2014 (10). According to Clain, the statewide minimum wage laws do not have much of an effect on poverty reduction, but the living wage laws moderately reduce poverty at the local level (11). The local laws will be the primary subjects of this investigation.

                                             TYPES OF LIVING WAGE LAWS

 Over 140 living wage ordinances are currently in effect throughout the nation, writes Luce, and they can be found in all types of places, from small towns to large cities (12). There are three basic types of living wage laws. Most are designed to cover only a few select industries and do not simply mandate a higher minimum wage for a given district: “Living wage legislation generally applies to a limited number of employers whereas minimum wage legislation applies much more broadly,” writes Clain (13).

 The first and most common type of living wage law applies only to private contractors working for the city. Luce reports that while most living wage laws apply to firms doing business with the municipality in some direct or indirect manner, the kinds of private industries and workers covered under these laws are extraordinarily arbitrary and vary from city to city (14). In reality, this type of living wage law only applies to a very small number of workers, according to Clain: “Estimates of the numbers of workers covered by living wage legislation are quite modest, around 1 to at most 2% of workers in the lowest quartile of the wage distribution (15).” Not surprisingly, these laws have a negligible economic impact, according to Adams & Neumark: “[L]iving wage laws that apply only to city contractors do not have detectable effects on wages or employment of low-skill individuals, nor on poverty rates (16).” 

The next type of living wage law is a sort of publicly-financed minimum wage that applies more broadly. It is usually not merely a matter of taxpayers making up the difference between the market wage and the mandated wage, although this could very well be happening indirectly. According to Adams & Neumark, the city typically extends some kind of concession to employers in the form of tax breaks, low-interest loans, financial assistance, grants, or some other form of support to help defray the increased cost of labor (17). Unlike the narrowly-focused laws involving only city contractors, these more expansive living wage laws do show significant statistical changes (18); wages tend to increase while net poverty goes down, but there is also a negative effect on employment, write Adams & Neumark (19). In another article, they confirm that the positive effect on wages seems to be a tradeoff for the negative effect on employment (20).

 The final step in the evolution of living wage laws is a comprehensive minimum wage far above the federal or state levels, with businesses having no expectation of reimbursement from the government. Laws of this type are still in their infant stage, but in April of 2015 Seattle will begin to phase in what stands to be the most extensive living wage law in the nation, culminating in a citywide minimum wage of $15 per hour (21).

                                            LIVING WAGE DETERMINATION

 Before debating the merits of living wage laws, the question of whether there really is a way to determine the living wage cannot be casually overlooked. Proponents of the living wage use that term as if it were based on some indisputable mathematical equation, yet hardly anyone inquires as to how they derive their figures. If the living wage in Seattle is truly $15, all is well, but that figure is undoubtedly the product of political haggling between activists and politicians, not economic evaluation. The fact of the matter, according to Anker, is that there is no universally accepted definition of what constitutes a living wage (22). Nevertheless, those who promote living wage legislation must necessarily decide on a concrete number that supposedly covers the cost of living. The figures they offer need to be scrutinized more closely.

 If the living wage is truly what its proponents say it is, namely, the minimum level of income needed for a respectable material existence (23), then it would seem logical for it to be tied to the poverty threshold. Remember that the original minimum wage could not have been linked to the poverty line because the federal government did not begin putting out official poverty data until 1965 (24), several decades after the first minimum wage. Remember also that it was never intended to be a living wage. However, since official poverty data are now available, it would only make sense to consult them when refashioning the minimum wage into a living wage.

 Unfortunately, even poverty measurement is not an exact science. While poverty rates are measured at every level—from the nation as a whole right down to individual localities (25) —sub-national poverty guidelines are only provided for Alaska and Hawaii (26). Additionally, the reliability of the official poverty rate is in question (27). In the opinion of Eberstadt, “The official poverty rate is incapable of representing what it was devised to portray: namely, a constant level of absolute need in American society” (28). Further criticism is leveled by Cushing & Zheng who contend that the statistics used to measure poverty in the U.S. are arbitrary (29). They believe that “Poverty in the United States varies greatly by location” (30), and that official reports put out by the government tend to overstate poverty in urban areas (31). Pollin points out that “The poverty benchmarks also take no account of regional differences in the cost of living” (32).

Still, the federal data are better than nothing. In 2014, the federal government set the poverty guideline at $23,850 for a family of four ($11,670 for an individual) (33). That suggests that a provider for a family of four would need to net only $11.47 per hour to stay out of poverty (an individual would need to net only $5.61) based on a forty-hour workweek over fifty-two weeks. Luce reports that “Most US living wage ordinances have set the living wage to the federal poverty line for a full-time worker with a family of three or four, although a few are set at 110 per cent or 120 per cent of that level” (34). These laws may also include cost-of-living increases, and rules that require employers to pay up to $2.00 more hourly if they do not provide health insurance, writes Luce (35).

 There is no getting around the subjective nature of living wage determination. Economists and activists are clearly using different formulae and their results fluctuate wildly. In 2008, the AFL-CIO upheld the supposed findings of a group of student activists at Harvard who concluded that the living wage is precisely $10.25 per hour (36). Pollin suggests using 140% of the poverty level as a benchmark, which would set the living wage at somewhere between $11.50 and $14.40 per hour for a single mother with two children, depending on the local cost of living (37). According to the enhanced criteria used by the Economic Policy Institute, writes Pollin, the living wage could reach astronomical levels; that single mother would need to earn as much as $31.60 per hour (in 2009 dollars) in a high-cost city (38).

 Before completely descending into madness, it should be pointed out that very few minimum wage earners are actually heads of households. Smith & Vavrichek provide these statistics on minimum wage earners: 44% are teenagers; 62% live with other adult relatives; only 11% live alone or with children solely; only 30% work 35 hours or more per week; and two-thirds are under age 25 (39). In these troubled economic times, there are certainly some well-educated professionals supporting large families who have found themselves in a minimum wage job because of some hardship, but they are the exception, not the rule. Making economic policy based on the assumption that most minimum wage earners are heads of households is irresponsible and contrary to the facts.

                  THE ECONOMIC IMPACT OF AN INCREASED MINIMUM WAGE

Because it is usually set so low, apologists for the minimum wage have heretofore gotten away with dismissing its negative consequences, such as an increase in consumer prices to offset the higher wage. Pollin admits this economic reality, but he does not believe that modest increases in the minimum wage will drastically affect consumer prices or consumption habits (40). However, in the example he cites, the minimum wage is only $8.50 (41). A minimum wage of $15 certainly has the potential to affect final prices, and at over $30 the economic ramifications would be mind-boggling. At these levels it is virtually guaranteed that the economy will be severely damaged by dramatic increases in prices and unemployment, along with a huge drop in consumer spending.

 Pollin concedes that “It is certainly true that raising the minimum wage too high or too rapidly will discourage businesses from hiring low-wage workers” (42). The fact is that any minimum wage law can have a deleterious effect on employment, writes Shaviro (43). “Most economists of all ideological persuasions have long agreed that it destroys jobs in the low-wage sector of the economy and thus hurts many of the people it is intended to help” (44). Fairris & Bujanda recognize that one of the effects of a minimum wage is that employers tend to replace low-skilled workers with high-skill workers (45). Shaviro writes that “Although a minimum wage could conceivably increase total income among low-wage workers…any such increase would accrue only to those who kept their jobs, leaving the least skilled as the likely losers” (46). Smith & Vavrichek reiterate the fact that increasing the minimum wage will most likely shut workers who lack skill or experience out of jobs (47), and Abdulahad & Guirguis report on their findings:

[P]art-time workers, teenagers, and minority groups experience the steepest decline in employment because of [sic] federal minimum wage. Thus, we expect the employment losses for such groups to be more pronounced in case of the higher living wages and the state minimum wage. This may be consistent with the claim of some business leaders who may be affected by the higher minimum and living wages and who say that higher wages could shut down small firms, discourage development and take a hefty toll on taxpayers. (48)

This would have a devastating effect on younger workers for whom job experience may be a more important form of remuneration than cash. A glaring weakness in the arguments of living wage proponents is their failure to recognize that there are benefits that accompany low-wage employment besides simple monetary compensation. Another blind spot is their reluctance to fully take into account the repercussions living wage laws have on the real economy, except for their positive income effects. Such parochialism will not serve when trying to ascertain whether the living wage is good policy.

                        DO LIVING WAGE LAWS PROVIDE A NET BENEFIT?

 There is a remarkable dearth of data showing the economic impact of wage floors, and there are several legitimate excuses for this. Firstly, the state and federal minimum wages have been too low to demonstrate any significant economic impact. Secondly, the most common types of living wage laws apply only to a microscopic segment of the workforce and therefore the results are mostly immeasurable. Thirdly, most citywide minimum wages are still fairly low, yielding scant spillover effects. Lastly, the extravagant citywide minimum wages such as Seattle’s will not be fully implemented for years, so the effects are yet unknown. The only way to evaluate the economic impact of augmented wage floors is by piecing together the few studies that have been done on the subject. 

The fact that living wage laws have shown a positive effect on wages should not be misconstrued to suggest that the policy has been an empirical success. Neumark & Adams explain that “[T]he evidence of potentially offsetting disemployment effects implies that this research will have to grapple with the question of whether living wage laws, on balance, help low-wage workers and low-income families” (49). The fact that wage floors cause a tradeoff between wages and employment is a given. If the only question is which of these criteria is most important, that is a matter of economists’ personal preferences. Kaufman criticizes other economists for focusing too narrowly on one aspect of the minimum wage, namely the competitiveness of labor markets, but he falls into the same trap because the criteria he would prefer to use when evaluating minimum wage laws ignore the cost of labor (50). The exact labor price at which an employer will begin to make significant changes varies according to the needs of the individual business. Rogers contends that minimum wages are typically set at levels too low to increase unemployment, but he concedes that at some point, higher wage floors will inevitably do so (51). According to Brecher, employers confronting a nationwide minimum wage that is too high can only respond by employing fewer workers or, in extreme cases, they will look to do business outside the country (52). State and local minimum wages do not require such drastic measures; the flight to safety may be only a few city blocks from the offending province. This dynamic deserves more attention.

                                                   SUBSTITUTION EFFECTS

 It would be laughable if a municipality passed a law mandating an exorbitant minimum wage for shops on one side of a street but not the other, yet that is precisely what is going on in the real economy. If someone is considering opening a business in a city with a living wage, there is a good probability it will be located just beyond city limits, where the law does not apply. This would harm established businesses within the city that must compete against the lower prices the new business can afford to offer. Over time, those businesses in the city may relocate to the suburbs, leaving the urban center to stagnate and decay. Melvin explains what could happen to unemployment in this scenario:

If wage floors differ among regions, then real wages would be expected to differ and interregional labor migration would result. It was shown that a region with a heavily unionized capital-intensive sector with a minimum wage (or a union) in the other sector could have both unemployment and high wages and could attract even more labor from other regions, further exacerbating the unemployment problem. (53)

In an economy that is still at least partially free, there is no doubt that workers, businesses, and consumers will adjust their behavior around whatever changes are made to wage floors. The substitution effects are virtually endless.

For an overly simplified example, suppose a $15 hourly wage is mandated for a construction company contracting with the city. This would theoretically benefit the flag wavers whose market wage is closer to $10 per hour, but what would this do to the skilled laborers whose market wage should be $20 per hour? The higher wage the skilled laborers deserve could be pulled down to offset the increased cost of the flag wavers’ labor, but it is much more likely that many of the flag wavers will simply be laid off. 

As the mandated salaries for unskilled workers approach the market rates for skilled ones, there is less of an incentive to learn a trade. Over time, increasing numbers of job-seekers in a locality tend to specialize in flag waving instead of carpentry, welding, or masonry—not to mention engineering, science, or medicine—which may have been professions better suited to the talents of the flag waver if the incentives had not been skewed toward complacency and instant gratification.

                                                               CONCLUSION

 Since it became federal law in the 1930s, the minimum wage had historically been an issue of almost no economic import; it usually only affected such a tiny portion of the economy that any negative effects went largely unnoticed. Wage floors usually have a directly proportionate negative impact on employment the further they are increased above the market wage. Until now, minimum wage laws have generally had no appreciable adverse effect on the economy because they basically set the wage floor at the market rate, or just slightly above it, so the cost of labor was mostly unchanged. Living wage laws, however, are a completely different story; they set the wage floor at a rate that is much higher than the market rate for many jobs. The increased cost of labor is substantial enough to have noticeable economic consequences, and, depending on how high the living wage is raised, these consequences could be profound.

It certainly would not be a bad thing if all minimum wage laws in the United States were repealed. In all likelihood, such an action would have almost no effect on real wages, since the market wage is probably at or close to the mandated wage. At the very least, any new legislation must be stopped immediately, especially the living wage laws that never seem to have an upper limit. The greed and covetousness of some in the living wage movement is bursting the limits of the Eighth and Tenth Commandments (54).

 Living wage advocates should be chastised for their faulty assumption that only government action and collective bargaining can raise wages. The best way to increase wages is to lower the unemployment rate, which shifts the labor supply curve in favor of workers and forces employers to compete for labor. Living wage laws only hamper the ability of employees to demand higher wages because they increase unemployment. The resulting increase in the supply of labor puts workers in a weaker bargaining position.

 The overwhelming majority of wages are well above the mandated floor because of free interaction between employees and employers, not because of picketing, harassment, or intimidation—all of which have become disturbingly commonplace in the living wage movement. The incessant crusade to push up wage floors could have dire political ramifications. Campaigns for living wage legislation rarely fail, despite fierce opposition from business, writes Luce (55). As the pressure mounts on political leadership to raise wage floors, there is the frightening possibility that the balance of power between labor and business could shift so far in the direction of labor that not only the economy but the entire political structure in some places will be severely damaged if not ruined. It is not hyperbole to declare that, without strong leadership, many great cities in the United States are in jeopardy of essentially being taken over by radical activism. It is the job of economically literate political leaders to sound the alarm when the public zeal threatens the public weal, and too many of them have shirked their responsibilities.

The unintended consequences of an extremely high minimum wage are countless. In a nation that still offers some degree of freedom in terms of choosing one’s occupation and place of residence—although those would be next on the chopping block after the freedom to sell one’s labor is infringed—it is unlikely that a single aspect of American life would remain unaffected by such a misguided policy. Not only does it abolish freedom from coercion, which is at the core of every other form of liberty, but it fosters a political environment in which victory goes to those who protest and conspire against their fellow citizens instead of working with them. If this is not un-American, nothing is.







                                                            BIBLIOGRAPHY:

 Abdulahad, Faraj & Hany S. Guirguis. "The Living Wage and the Effects of Real Minimum Wages on Part-Time and Teen Employment." Employee Responsibilities & Rights Journal 15, no. 1 (March 2003): 1-9.

 Adams, Scott & David Neumark. "When Do Living Wages Bite?." Industrial Relations 44, no. 1 (January 2005): 164-192. Anker, Richard. "Living Wages Around the World: A New Methodology and Internationally Comparable Estimates." International Labour Review 145, no. 4 (December 2006): 308-338.

 Brecher, Richard A. "Minimum Wage Rates and the Pure Theory of International Trade." Quarterly Journal Of Economics 88, no. 1 (February 1974): 98-116.

 Clain, Suzanne. "How Living Wage Legislation Affects U.S. Poverty Rates." Journal Of Labor Research 29, no. 3 (Summer 2008): 205-218.

 Cushing, Brian & Buhong Zheng. "Re-evaluating Differences in Poverty among Central City, Suburban, and Nonmetropolitan Areas of the US." Applied Economics 32, no. 5 (April 2000): 653-660.

 Eberstadt, Nicholas. "Material Deprivation, the ‘Poverty Rate’ and Household Expenditure in Modern America." Economic Affairs 27, no. 3 (September 2007): 15-23.

 Fairris, David & Leon Fernandez Bujanda. "The Dissipation of Minimum Wage Gains for Workers through Labor-Labor Substitution: Evidence from the Los Angeles Living Wage Ordinance." Southern Economic Journal 75, no. 2 (October 2008): 473-496.

 Kaufman, Bruce E. "Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate." Industrial & Labor Relations Review 63, no. 3 (April 2010): 427-453.

 Luce, Stephanie. "Living Wage Policies and Campaigns: Lessons from the United States." International Journal Of Labour Research 4, no. 1 (January 2012): 11-26.

 Melvin, James R. "The International and Interregional Effects of Minimum Wages and Unionization." International Trade Journal 2, no. 3 (Spring 1988): 223-246.

 National Conference of State Legislatures. “State Minimum Wages: 2014 Minimum Wage by State.” Accessed November 19, 2014: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx.

 Neumark, David & Scott Adams. "Detecting Effects of Living Wage Laws." Industrial Relations 42, no. 4 (October 2003): 531-564.

 Pollin, Robert. "Economic Prospects: Making the Federal Minimum Wage a Living Wage." New Labor Forum (Routledge) 16, no. 2 (April 2007): 103-107.

 Rogers, Brishen. "Justice at Work: Minimum Wage Laws and Social Equality." Texas Law Review 92, no. 6 (May 2014): 1543-1598. Seattle.gov. “$15 Minimum Wage.” Accessed November 19, 2014: http://murray.seattle.gov/minimumwage/#sthash.TGMgZjEJ.C3keWfYm.dpbs

 Shaviro, Daniel. “The Minimum Wage, the Earned Income Tax Credit, and Optimal Subsidy Policy.” University of Chicago Law Review 406, no. 64 (1997): 405-482.

 Smith, Ralph E. & Bruce Vavrichek. "The Wage Mobility of Minimum Wage Workers." Industrial & Labor Relations Review 46, no. 1 (October 1992): 82-88.

 Stapleford, Thomas A. "Defining a 'Living Wage' in America: Transformations in Union Wage Theories, 1870-1930." Labor History 49, no. 1 (February 2008): 1-22.

 U.S. Department of Health and Human Services. “2014 Poverty Guidelines.” Accessed December 2, 2014: http://aspe.hhs.gov/poverty/14poverty.cfm




                                                                         NOTES:

 (1) Brishen Rogers, "Justice at Work: Minimum Wage Laws and Social Equality." Texas Law Review 92, no. 6 (May 2014), 1544-1545.
 (2) Daniel Shaviro, “The Minimum Wage, the Earned Income Tax Credit, and Optimal Subsidy Policy,” University of Chicago Law Review 406, no. 64 (1997), 406.
 (3) Faraj Abdulahad & Hany S. Guirguis, "The Living Wage and the Effects of Real Minimum Wages on Part-Time and Teen Employment," Employee Responsibilities & Rights Journal 15, no. 1 (March 2003), 3.
 (4) Ibid.
 (5) Rogers, “Justice at Work,” 1544.
 (6) Thomas A. Stapleford, "Defining a 'Living Wage' in America: Transformations in Union Wage Theories, 1870-1930," Labor History 49, no. 1 (February 2008), 2-3.
 (7) Ibid., 3.
 (8) Stephanie Luce, "Living Wage Policies and Campaigns: Lessons from the United States," International Journal Of Labour Research 4, no. 1 (January 2012), 15.
 (9) Ibid.
 (10) National Conference of State Legislatures, “State Minimum Wages: 2014 Minimum Wage by State,” Accessed November 19, 2014: http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx
 (11) Suzanne Clain, "How Living Wage Legislation Affects U.S. Poverty Rates," Journal Of Labor Research 29, no. 3 (Summer 2008), 206.
 (12) Luce, “Living Wage Policies,” 19.
 (13) Clain, “How Living Wage Legislation,” 206.
 (14) Luce, “Living Wage Policies,” 14.
 (15) Clain, “How Living Wage Legislation,” 206
 (16) Scott Adams & David Neumark, "When Do Living Wages Bite?," Industrial Relations 44, no. 1 (January 2005), 164.
 (17) Ibid., 164-165.
 (18) Ibid., 164.
 (19) Ibid., 165.
 (20) David Neumark & Scott Adams. "Detecting Effects of Living Wage Laws." Industrial Relations 42, no. 4 (October 2003), 531.
 (21) Seattle.gov, “$15 Minimum Wage,” Passed Legislation Section, Accessed November 19, 2014: http://murray.seattle.gov/minimumwage/#sthash.TGMgZjEJ.C3keWfYm.dpbs
 (22) Richard Anker, "Living Wages Around the World: A New Methodology and Internationally Comparable Estimates," International Labour Review 145, no. 4 (December 2006), 310.
 (23) Stapleford, “Defining a ‘Living Wage’,” 2-3.
 (24) Nicholas Eberstadt, "Material Deprivation, the ‘Poverty Rate’ and Household Expenditure in Modern America," Economic Affairs 27, no. 3 (September 2007), 15.
 (25) Ibid.
 (26) U.S. Department of Health and Human Services, “2014 Poverty Guidelines,” Accessed December 2, 2014: http://aspe.hhs.gov/poverty/14poverty.cfm
 (27) Eberstadt, “Material Deprivation,” 15.
 (28) Ibid., 23.
 (29) Brian Cushing & Buhong Zheng, "Re-evaluating Differences in Poverty among Central City, Suburban, and Nonmetropolitan Areas of the US," Applied Economics 32, no. 5 (April 2000), 653.
 (30) Ibid.
 (31) Ibid.
 (32) Robert Pollin, "Economic Prospects: Making the Federal Minimum Wage a Living Wage," New Labor Forum (Routledge) 16, no. 2 (April 2007), 104.
 (33) U.S. Department of Health and Human Services, “2014 Poverty Guidelines.”
 (34) Luce, “Living Wage Policies,” 13.
 (35) Ibid.
 (36) Stapleford, “Defining a ‘Living Wage’,” 1.
 (37) Pollin, “Economic Prospects,” 104.
 (38) Ibid.
 (39) Ralph E. Smith & Bruce Vavrichek, "The Wage Mobility of Minimum Wage Workers," Industrial & Labor Relations Review 46, no. 1 (October 1992), 84.
 (40) Pollin, “Economic Prospects,” 105-106.
 (41) Ibid.
 (42) Ibid., 105.
 (43) Shaviro, “The Minimum Wage,” 406.
 (44) Ibid.
 (45) David Fairris & Leon Fernandez Bujanda, "The Dissipation of Minimum Wage Gains for Workers through Labor-Labor Substitution: Evidence from the Los Angeles Living Wage Ordinance," Southern Economic Journal 75, no. 2 (October 2008), 473.
 (46) Shaviro, “The Minimum Wage,” 406.
 (47) Smith & Vavrichek, “The Wage Mobility,” 88.
 (48) Abdulahad & Guirguis, “The Living Wage,” 7.
 (49) Neumark & Adams, “Detecting Effects,” 563.
 (50) Bruce E Kaufman, "Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate," Industrial & Labor Relations Review 63, no. 3 (April 2010), 427.
 (51) Rogers, “Justice at Work,” 1547-1548.
 (52) Richard A. Brecher, "Minimum Wage Rates and the Pure Theory of International Trade," Quarterly Journal Of Economics 88, no. 1 (February 1974), 116.
 (53) James R. Melvin, "The International and Interregional Effects of Minimum Wages and Unionization," International Trade Journal 2, no. 3 (Spring 1988), 244.
 (54) Exodus 20:15,17.
 (55) Luce, “Living Wage Policies,” 19.

Great Society Liberalism and the Consequences for the Black Community

No one should need to be reminded of what kind of obstacles African slaves and their descendants have had to struggle against in the hope of achieving economic and political power in the United States. It is therefore a tragic irony that at the exact point when opportunities finally became available in the wake of the civil rights movement, they disappeared in the malaise that accompanied the black leadership’s and liberal politicians’ obsession with social justice in the latter half of the 1960s. While certainly not as malevolent as slavery, lynching, or segregation, the welfare state has been able to corrupt the very fabric of the black community in ways those other evils never could. Although their stated intention was to help poor blacks suffering from years of repression and apathy, the liberal Great Society programs have had almost the diametrically opposite effect on this most neglected and deserving group of Americans.

The civil rights era had brought with it a multitude of well-meaning mandates such as affirmative action, minority hiring quotas, and a massive expansion of welfare. All of this was done with full approval from the black leadership. After the signing of the Civil Rights Act of 1964, the Rev. Dr. Martin Luther King, Jr. and his peers found new jobs as crusaders for social justice, seeking to provide vocational and educational opportunities to the citizens for whom they had labored so hard to liberate. King believed that economic disparities among blacks could be solved by a government-sponsored, “broad-based and gigantic Bill of Rights for the Disadvantaged” (128). [1] So confident was King that he virtually guaranteed its success:

“I would challenge skeptics to give such a bold new approach a test for the next decade. I contend that the decline in school dropouts, family breakups, crime rates, illegitimacy, swollen relief roles and other social evils would stagger the imagination.”(128)

President Johnson shared King’s sympathies, and shortly after he assumed office the federal programs that would comprise the Great Society were underway. Lamentably, the results in all of those areas mentioned were indeed staggering but not in the way the immortal civil rights hero would have been proud of.

It was precisely at the point when the government took the largest role in trying to improve the lives of poor blacks that, by almost every imaginable metric, their quality of life began a sharp decline. Perhaps no other researcher has documented the aftermath of the Great Society initiatives better than sociologist Charles Murray. His work, Losing Ground: American Social Policy 1950-1980, details the tragic outcome of the War on Poverty [2], with the years leading up to it thrown in for context. Murray’s criticism of the liberal initiatives is limited solely to how they have affected the poor, and poor blacks in particular. His verdict is simple and brutal. Murray writes:

“Basic indicators of well-being took a turn for the worse in the 1960s, most consistently and most drastically for the poor. In some cases, earlier progress slowed; in other cases mild deterioration accelerated; in a few instances advance turned into retreat.” (8)

Specifically regarding blacks and poverty, Murray claims their progress had actually been steady in the early sixties, boosted by a booming economy and the civil rights movement (63), but he adds that “Progress stopped coincidentally with the implementation of the Great Society’s social reforms [Emphasis in the original]” (63). In the fifteen years from 1965 until 1980, the situation of poor blacks had deteriorated to levels that would have been unbelievable to even the most pessimistic social scientist from before the Great Society era (Murray 136). The Rev. King has already outlined five specific areas in which he anticipated improvement for blacks: education, the family, unemployment, crime, and welfare. Let us examine each one in turn and see how close the outcomes came to the lofty expectations.

In the educational realm, the results were atrocious. Education officials brought the standards down to the level of the most deprived students instead of seeking to elevate everyone to excellence, and after fifteen years the regression among black students was impossible to ignore. Murray laments that “...[A]s of 1980 the gap in educational achievement between black and white students leaving high school was so great that it threatened to defeat any other attempts to narrow the economic differences separating blacks from whites” (105). He cites that in a national aptitude test of 18- to 23-year-olds conducted in 1980, the average white score was 2.3 times higher than that of blacks (Murray 105). Murray adds that, in the same survey, “The average white was reading at nearly a tenth grade level, while the average black tested was reading at a seventh-grade level” (105-106). SAT scores revealed further troubles. Murray reports that “As of 1980, the mean SAT score of blacks was....more than 100 points lower....than the mean for whites” (106), and that an alarming number of black students were receiving abysmally low SAT scores, meaning those of less than 300: as of 1980 this group included an astounding 25 percent of black test-takers, compared with only 3.5 percent of white test-takers (Murray 106). As far as enrollment was concerned, Murray believes that “Underestimates of dropout rates are....very high” (98), and adds that attendance in inner-city schools is often overestimated (98). This is not what the Rev. King had hoped for.

The War on Poverty had left the black family utterly decimated. Even in the early days of President Johnson’s tenure, it was becoming painfully clear that welfare was having an injurious impact on many black households. Kay S. Hymowitz explains:

“In the past, policymakers had assumed that if the male heads of household had jobs, women and children would be provided for. This no longer seemed true. Even while more black men....were getting jobs, more black women were joining the welfare rolls.” (Hymowitz)

In effect, AFDC [3] had replaced the working family man with a government subsidy, so it should have come as no surprise that many black fathers had either a diminished or nonexistent role when it came to raising their children. John McWhorter writes that “Between 1964 and 1976, the number of black children born to single mothers doubled, to 50 percent, and by 1995 the percentage was more than three-quarters” (125). There was not a surge in out-of-wedlock births before the War on Poverty; only after 1964 did the problem become widespread. According to Murray, the black illegitimacy rate rose only slightly, from 17 percent in 1950 to 23 percent in 1963 (126). If the rise had been proportionate to how it had been prior to the War on Poverty, only around 29 percent of black births would have been illegitimate in 1980; instead the figure was 48 percent, nearly four times the expected increase, and more than four times the rate for whites (Murray 126). That number was even higher in the inner city; in New York the rate of black illegitimacy was reported to be as high as 66 percent (Hymowitz). Illegitimacy is a more than just a sign of moral decay; the purposeful breakup of slave families, in conjunction with the prohibition on slaves owning property, was one of the main reasons why, many generations after emancipation, blacks were still far behind whites financially. Without a complete family, wealth cannot be accumulated and passed down to the next generation. A fatherless child is one who inherits nothing.

The black unemployment statistics were bizarre. Jobs were not the issue; in the 1960s they could be found everywhere. McWhorter tells us that black unemployment was cut almost in half in the midst of the Great Society, from 7.8 percent in 1960 down to 4.2 percent [4] in 1970 (117), but for some odd reason, young blacks were not working. The problem was that while older blacks were finding employment relatively easily, younger workers were rapidly dropping out of the job hunt. Murray explains that labor force participation [5] among black working-aged men had been about the same as for whites through the civil rights years, but the late 1960s began a precipitous decline in black LFP, especially among the youngest workers, while at the same time white LFP was either holding steady or increasing (Murray 76-77). Regarding the federal job-creation and job-training efforts, Murray asserts that “...[F]ailure was nearly universal” (36). Murray concludes that “It was difficult to take much satisfaction in the legal edifice of black rights when black teenage unemployment was approaching 40 percent” (145). Simply stated, the results show that all of the programs, quotas, and other federal initiatives had not only failed to increase the amount and quality of career opportunities for young blacks, they had actually reduced their employability to a level far worse than from before the civil rights movement.

The effect of the War on Poverty on crime was horrifying. From 1963 to 1980, the murder rate had more than doubled, the rates of forcible rape and robbery had each gone up almost 300 percent, and various other types of crimes had risen tremendously (Murray 115). While the increase in crime was not unique to the black race, and probably not entirely attributable to the liberal reforms, Murray is adamant that in the Great Society years,“[B]lack behavior toward crime changed in a way that is qualitatively different from the way that white behavior changed” (116). 91 percent of the increase in black arrests between 1960 and 1980 occurred in the small window from 1965 to 1970 (Murray 118), and Murray adds that “The increase in arrests for violent crimes among blacks during the 1965-70 period was seven times that of whites [Emphasis added]” (118). To avoid the accusation that critics of liberalism are blaming the surge in crime on one particular race, it should be revealed who the victims were: Murray’s statistics point out that blacks in general, and lower-income urban blacks in particular, were victimized at a far greater rate than whites in the years subsequent to the War on Poverty (119).

In cataloging the myriad ways in which the black community had retrogressed after the Great Society, and our search for a single root cause, the constant refrain is welfare. Welfare did not begin with the Great Society, but in the 1960s the government relaxed the eligibility requirements (McWhorter 121), and the number of recipients grew dramatically. The Rev. King would have been disheartened by the size of the increase: McWhorter tells us that from 1960 to 1970 this figure rose by 169 percent (116), and that “Even in 1961, 43 percent of welfare recipients were black, even though at the time only about one in ten Americans were black” (116). After a decade, things were even worse. McWhorter goes on to say that “...[I]n 1970, in New York City, 47 percent of the people on AFDC were black...” (117). When the eligibility rules were relaxed for other social safety nets, they too saw a massive spike in enrollees: The number of recipients of disability compensation increased by well over five hundred percent from 1960 to 1975 (Murray 47). The variables are many in each of these cases, but the one constant is accessibility was increased, which has to explain at least some of the surge in the number of claims.

Aside from the hollow charges of racism or ‘social Darwinism’, which are baseless and not worth wasting time refuting, apologists for the welfare state generally counter with three kinds of arguments, not one of them disputing the fact that the War on Poverty was a failure. The first is that the decline in the general condition of blacks which began in the mid-1960s was the fault of other elements, not the enticement of the anti-poverty programs, and this view is shared by Christopher Jencks. For example, welfare payments had started becoming less valuable in real dollars after 1973, yet black illegitimacy rates continued to climb (McWhorter 133). Jencks claims that “Since making welfare less attractive did not discourage single parenthood after 1973, it no longer seems likely that raising benefits encouraged it before 1973” (qtd. in McWhorter 133). The flaw in Jencks’ logic is that, at least in this case, he is using a relatively late date as a divider. In order to convince us that the War on Poverty was not the gate through which flowed all of the social ills we have documented, he must explain why, in the middle of the racial repression of the 1950s, blacks were socially healthier than they were after the government arrived on the scene in 1964 with of all its ‘help’. It is supremely difficult to argue that blacks had an easier time in America before the Civil Rights Act of 1964 than after it. If anything, blacks should have made strident gains during the post-civil rights years with their newly-acquired advantages, yet their fates began to take a turn for the worse beginning at that exact moment. Whether it was definitely the government intrusion that reversed the progress is up for debate. The timing is not.

The second type of argument is that, while again acknowledging the harm done to the black citizenry by the Great Society, the presumption is made that the damage would have been even worse if the government had not intervened with all of its aid programs, however Quixotic they turned out to be. Sympathetic to this view is Douglas G. Glasgow, author of The Black Underclass, who gives a first-hand account of ghetto youth ostensibly trapped in the kind of poverty the Johnson-era reforms were targeting. This is why Murray’s contextual period from 1950 to 1964 is so vital. If the trend lines had suggested a rise in black societal problems in the pre-1964 period and then a sustained reduction after the liberal reforms, then this argument would be valid. Unfortunately, that is the polar opposite of what actually happened; Murray reminds us that “The numbers go the wrong way at the wrong time” (56). If Glasgow is looking for a causal condition for his ghettoes and the deprived individuals who are trapped in them, he might want to consider listening to Kay Hymowitz:

“According to....Moynihan and economist Paul Offner, of the black children born between 1967 and 1969, 72 percent received Aid to Families with Dependent Children before the age of 18. School dropout rates, delinquency, and crime, among the other dysfunctions that Moynihan had warned about, were rising in the cities. In short, the 15 years since the report was written had witnessed both the birth of millions of fatherless babies and the entrenchment of an underclass [Emphasis added].” (Hymowitz)

Glasgow’s conclusion does not take into account the debilitating effect of welfare, and this economic law cannot be ignored. His conclusion is typical: an appeal for government to assume even more control over poor blacks via many of the same agencies which got them into such a mess (Glasgow 194), but this solution is as asinine as an observer noting the deplorable condition of Southern blacks in, say, the year 1865, and recommending that what is needed to help these people is for the same policy the government had toward them fifteen years prior to be re-implemented, only with more vigor.

The last arrow in the liberals’ quiver is the inevitable emotional appeal. Typically, these critics deploy a real, live struggling single mother and her offspring to be used as human shields, and declare that anyone suggesting their benefits be curtailed is an ogre. A complementary tactic is to exaggerate the degree to which welfare opponents insinuate that the dependency culture fosters lasciviousness, corruption, and vice. After his excursion into the ghetto to write Myth of the Welfare Queen, [6] David Zucchino proclaims that “If there were any Cadillac-driving, champagne-sipping, penthouse-living welfare queens in North Philadelphia, I didn’t find them” (13). Unfortunately for his worldview, what Zucchino did find, no matter how he tries to spin it, were people and communities victimized by the welfare-driven status quo he isn’t comfortable with changing. Zucchino’s fears about the Welfare Reform Act of 1996 might have been assuaged if he had known then what McWhorter would happily report a few years after its enactment: “...[T]he predictions so common in 1996 that poor blacks would be starving on the streets have shown themselves dead wrong” (135). McWhorter is also pleased to report that the percentage of black children born into poverty “[W]as just 30 percent by 2002, and the fall from 44 percent in 1993 was sharpest after...1996” (135). If the intimation is made that some people are getting rich off welfare, it does not apply to AFDC recipients but bureaucrats and corrupt middle-men. Economist Thomas Sowell notes that “Even in specifically poverty-oriented programs....the bulk of the money does not actually reach the poor but rather is paid to the predominantly middle-class suppliers of professional services designed to ‘fight poverty’” (197). Sowell might have summed up all of the criticism of the strategy employed by the Rev. King and President Johnson with this statement:

“Government programs....have their benefits and their disadvantages. Those best able to maximize the benefits and minimize the disadvantages are those already well off, financially and socially, and those most likely to end up with the smallest benefits and the largest losses are the poor, the less educated, the less organized, and the less prestigious. Disadvantaged minorities are clearly in the latter category.” (199)

This leads us to the most insidious aspect of welfare: the Cloward-Piven strategy. Richard Cloward and Frances Fox Piven were radical white university professors who in 1966 devised a plan to turn the United States into a dictatorship by abusing the welfare system. They sought to create as many welfare dependents as possible, hoping to overwhelm the system and collapse the entire American economy (McWhorter 120). Their organization lobbied to reduce the restrictions on welfare to the point where almost anyone could get it (McWhorter 120-121). They disrupted civic affairs and held rallies, sometimes alongside the Black Panthers, to discourage the poor, especially poor blacks, from seeking jobs and working (McWhorter 120). Ameliorating poverty had absolutely nothing to do with it; blacks were merely pawns in their anarchistic game. McWhorter remarks that “Rarely in American history have people with such an openly radical, and even destructive, agenda had such power over the daily lives of innocent people” (120).

The point will be made that the 1980s’ trend toward conservative thought and ultimately the Welfare Reform Act of 1996 have made the debate over open-ended, sixties-style welfare policy obsolete. However, the brief period of rationality ended with the election of President Barack Obama. He appears all too willing to encourage one of the most destructive aspects of black radical thought, which is the cultivation of a mindset where blacks look to the government as their only escape from problems created by, ultimately, that same government. Peter Nicholas of the L.A. Times writes:

“The Republican Ronald Reagan once quipped that the most ‘terrifying words’ in the English language were ‘I'm from the government, and I'm here to help.’ Democrat Bill Clinton proclaimed in a State of the Union speech 13 years ago that ‘the era of big government is over.’
“But in an address here Thursday, President-elect Barack Obama said government was the solution.” (Nicholas)

Apparently, someone did not get the message. Fred Lucas of CNS News reports that “Obama’s spending proposals call for the largest increases in welfare benefits in U.S. history....This will lead to a spending total of $10.3 trillion over the next decade on various welfare programs” (Lucas). The country is now in the hands of a man who believes that capitalists are inherently wicked (Obama 126), that America is “a racial caste system” (Obama 317), and has been influenced by radicals of every stripe, including black marxists (Obama 129), black nationalists (Obama 182), and a “Black Power” militant (Obama 90). This comes as no surprise to James Simpson, who worries that the Cloward-Piven strategy is reflected in the Obama administration’s priorities:

“The real goal of ‘healthcare’ legislation, the real goal of ‘cap and trade,’ the real goal of ‘stimulus’ is to rip the guts out of our private economy and transfer wide swaths of it over to government control....These initiatives are vehicles for change. They are not goals in and of themselves, except in their ability to deliver power, and will make matters much worse, for that is their design.
“This time, in addition to overwhelming the government with demands for services, Obama and the Democrats are overwhelming political opposition to their plans with a flood of apocalyptic legislation.” (Simpson)

That is strong language, but not misplaced. In his first year in office, President Obama submitted a gargantuan budget of 3.6 trillion dollars, the largest in U.S. history by far, with no explanation of how it will be paid for. It is impossible to ascertain what kind of damage these atavistic economic policies will do to the black community, but if the president is as radical as Simpson thinks he is, that will be the least of our problems. In any case, the immediate results do not inspire hope. Black unemployment has already risen to a devastating level: 15.2 percent in November, up from 11.2 percent after the election one year prior (U.S. Dept. of Labor, Bureau of Labor Statistics).

Based on the evidence, there are two incontrovertible statements which can be said of the liberal reforms of the mid-sixties and their impact on black Americans. The first is that the economic status of black Americans had, in fact, been improving before the War on Poverty despite glaring racial disparities and the lack of quality education. Without federal aid, black poverty was cut in half: The percentage of the black population considered poor dropped from 90 percent in 1940 to less than 50 percent in 1960, even though the number of blacks receiving government assistance during this time period was negligible (McWhorter 117). The second truth is that the overall condition of the black community in America had deteriorated substantially after the federal government had put forth a monumental effort to improve it. The conclusion drawn, therefore, is that the government, which had established and enforced slavery, Jim Crow, and segregation, cannot be the means for correcting these historical injustices. The solution is to remove the government as far as possible from the natural constructive forces in the black community, these being families, businesses, churches, and educational institutions, and let them develop on their own. Had the government taken this approach in the 1960s, the rise in black progress may have been slow, but steady; and the catastrophic side-effects of the War on Poverty never would have materialized.

If black Americans are ever going to achieve comparable economic status with whites, they are going to have to evolve out of the swamp of liberalism, sever ties with the Democrat party, and embrace conservatism. Blacks are understandably leery of any philosophy that takes it cue from America’s past, for it has not been kind to them, but conservatism is a belief system based on the core principles of the abolitionists and anti-segregationists; the self-aggrandizing myths promulgated by racial demagogues notwithstanding. The despicable strategy used during the 1964 presidential campaign to portray Senator Goldwater as a racist is the epitome of the misinformation disseminated by the liberal establishment. This was said of a man who had spent his entire life among the native peoples of Arizona, had himself been the victim of anti-Semitism, became the first minority to run for president forty years before anyone had even heard of Barack Obama, favored school integration [7], voted for the Civil Rights Acts of 1957 and 1960, and whose only reason for opposing the Civil Rights Act of 1964 was that it wasn’t good enough! [8] Similar calumnies have been hurled in the direction of President Reagan and House Speaker Gingrich, the two men who may have done more to eliminate economic disparities among blacks than the entire apparatus of the War on Poverty. Unfortunately, if blacks continue to conform to the liberal establishment’s ideal rather than risk being derided as ‘race traitors’ and ‘sellouts’ [9], economic progress will be limited to those courageous few who care less about skin pigmentation than what is beneath the surface, which, incidentally, is the whole point.

Those who think that blacks are perpetually disadvantaged and incapable of doing the hard work necessary to succeed in America do not have history on their side. Frederick Douglass, who was all too familiar with the welfare system of the plantation (26), said of his first wage-job that “It was a happy moment, the rapture of which can be understood only by those who have been slaves” (119), and that “It was to me the starting-point of a new existence.” (119). There was a man who was not looking for a handout. Booker T. Washington said “...I have never had much patience with the multitudes of people who are always ready to explain why one cannot succeed” (46). Those aren’t the words of a man who would be clamoring for affirmative action. All Americans should follow the example of these great men to work to fulfill the noblest plank of the civil rights movement: using all of the opportunities inherent in free-market capitalism to create the color-blind society where no one is barred from access to education, gainful employment, or anything else, for a reason so frivolous as race.

BIBLIOGRAPHY:

Avlon, John. “The New Welfare Queens.” The Daily Beast: Blogs and Stories, 21 March 2009.

Douglass, Frederick. Narrative of the Life and Times of Frederick Douglass, An
American Slave, Written by Himself. 1845. Introduction Peter J. Gomes. Afterword Gregory Stephens. New York: Penguin 2005.

Glasgow, Douglas G. The Black Underclass: Poverty, Unemployment, and Entrapment of
Ghetto Youth. San Francisco: Jossey-Bass, 1980.

Goldwater, Barry Morris. The Conscience of a Conservative. New York: Victor, 1960.

Hymowitz, Kay S. “The Black Family: 40 Years of Lies.” City Journal, Summer 2005.


Kennedy, Randall. Sellout: The Politics of Racial Betrayal. New York: Random House, 2008.

King, Jr., Martin Luther. Why We Can’t Wait. 1963. Afterword Jesse L. Jackson, Sr. New York: Penguin Putnam, 2000.

Lucas, Fred. “Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals.” CNSNews.com. 23 September 2009.
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McConnell, Campbell R., and Brue, Stanley L. Economics: Principles, Problems, and
Policies. New York: McGraw-Hill, 2005

McWhorter, John. Winning the Race: Beyond the Crisis in Black America. New York: Gotham Books, 2005.

Murray, Charles. Losing Ground: American Social Policy 1950-1980. New York: Basic Books, 1984.

Nicholas, Peter. “Obama to seek support for nearly $1-trillion recovery plan.” Los Angeles Times. 9 January 2009.
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Obama, Barack. Dreams From My Father: A Story of Race and Inheritance. New York: Times, 1995.

Roosevelt, Franklin Delano. The Public Papers & Addresses of Franklin D. Roosevelt. Samuel Rosenman, ed., Vol XIII. New York: Harper, 1950, 40-42.

Simpson, James. “Cloward-Piven Government.” DC Independent Examiner. 22 November 2009. .

Sowell, Thomas. Race and Economics. New York: David McKay Co., 1975.

U.S. Department of Labor. Bureau of Labor Statistics. “Economic News Release. Table A-2: Employment Status of the Civilian Population by Race, Sex, and Age.” 4 December 2009.

Voegeli, William. “Civil Rights and the Conservative Movement.” Claremont Review of Books. Summer 2008.

Washington, Booker Taliaferro. Up From Slavery. 1901. Introduction Ishmael Reed. New York: Penguin Putnam, 2000.

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Portrayal of Women on the Line. New York: Scribner, 1997.

NOTES:

[1] King claims that his “Bill of Rights for the Disadvantaged” was modeled after the G.I. Bill for veterans (128), but it appears more like President F. Roosevelt’s “Second Bill of Rights” spelled out in his January 1944 State of the Union address, which would have been virtually impossible to implement without a total government takeover of the economy. For a complete list of FDR’s ‘rights’, see The Public Papers & Addresses of Franklin D. Roosevelt, 40-42.

[2] To refer to the years 1964-1967 when the most drastic changes took place, Murray uses the terms ‘War on Poverty’, ‘Reform Period’, and ‘Great Society’ interchangeably (24-25). This report will do the same.

[3] Aid to Families with Dependent Children, or AFDC, was the preeminent form of welfare and usually synonymous with the term. Prior to 1963 it was known as Aid to Dependent Children (ADC).

[4] This statistic is even more telling when taking into account the fact that economists usually consider an unemployment rate of around 4 percent to be full-employment (McConnell and Brue 137-138).

[5] The ‘labor force participation rate’, or LFP, is an economic statistic which expresses the percentage of the total working-aged population that is in the labor force (McConnell and Brue 310). Disincentives to work, such as welfare, cause this percentage to go down.

[6] The term ‘welfare queen’ originated in a 1976 speech by Ronald Reagan: “She has 15 names, 30 addresses, 12 Social Security cards, and is collecting veteran's benefits on four non-existing deceased husbands....She is collecting Social Security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names” (qtd. in Avlon). When pressured to identify this woman Reagan either could not or refused to do so, giving his critics the ability to say the story was fabricated. Whether Reagan’s anecdote referred to an actual person or was a metaphor is unclear to this day, but according to John Avlon, “It turns out the story, while mostly apocryphal, did have one actual antecedent—a woman from the South Side of Chicago who was busted in 1976 for using four identities to defraud the government out of $8,000” (Avlon).

[7] Goldwater writes: “...I am in agreement with the objectives of the Supreme Court as stated in the Brown decision. I believe that it is both wise and just for negro children to attend the same school as whites, and that to deny them this opportunity carries with it strong implications of inferiority [Emphasis in the original]” (Goldwater 38).

[8] While he was in agreement with most of the provisions of the Civil Rights Act of 1964, William Voegeli writes that Goldwater “...could find ‘no constitutional basis for the exercise of Federal regulatory authority’ over private employment or public accommodations, Goldwater called the law ‘a grave threat’ to a ‘constitutional republic...’” (Voegeli).

[9] Randall Kennedy confirms that “Scores of black conservatives have been derided as sellouts” (65), including Sowell (65) and McWhorter (66). Justice Clarence Thomas, the most prominent black conservative ever is, according to Kennedy, “...the most vilified black official in the history of the United States” (87-88).