FDR's Attack on Blacks

How the minimum wage and FDR's agricultural policies particularly hurt black men.

This morning, I was in a Zoom discussion with an economist who is one of the leading experts on the minimum wage. His data showed that the minimum wage particularly hurts black youths. The late Walter Williams often made that point.

I pointed out to the economist that that observation was made as early as 1944. Gunnar Myrdal, the Swedish economist who was sympathetic to socialism and who shared the 1974 Nobel Prize in economics with Friedrich Hayek, had stated the point quite eloquently in his 1944 classic, An American Dilemma.

Myrdal wrote:

During the ’thirties the danger of being a marginal worker became increased by social legislation intended to improve conditions on the labor market. The dilemma, as viewed from the Negro angle is this: on the one hand, Negroes constitute a disproportionately large number of the workers in the nation who work under imperfect safety rules, in unclean and unhealthy shops, for long hours, and for sweatshop wages; on the other hand, it has largely been the availability of such jobs which has given Negroes any employment at all. As exploitative working conditions are gradually being abolished, this, of course, must benefit Negro workers most, as they have been exploited most—but only if they are allowed to keep their employment. But it has mainly been their willingness to accept low labor standards which has been their protection. When government steps in to regulate labor conditions and to enforce minimum standards, it takes away nearly all that is left of the old labor monopoly in the “Negro jobs.”

As low wages and sub-standard labor conditions are most prevalent in the South, this danger is mainly restricted to Negro labor in that region. When the jobs are made better, the employer becomes less eager to hire Negroes, and white workers become more eager to take the jobs from the Negroes. (p. 397)

As I noted in my biography of Myrdal in David R. Henderson, ed., The Concise Encyclopedia of Economics, this analysis predated that of George Stigler by 2 years.

The minimum wage was introduced at the federal level in FDR’s second term as president.

Myrdal was also critical of FDR’s agricultural policies.

Before I give the quote, ask yourself what happens to sharecroppers when there is no crop, or much less of a crop, to share.

Here’s the quote:

Of all the calamities that have struck the rural Negro people in the South in recent decades—soil erosion, the infiltration of white tenants into plantation areas, the ravages of the boll weevil, the southwestern shift in cotton cultivation—none has had such grave consequences, or threatens to have such lasting effect, as the combination of world agricultural trends and federal agricultural policies initiated during the thirties. (p. 254)

In an attempt to stabilize farm income, wrote Myrdal, the U.S. government restricted the production of cotton, putting hundreds of thousands of mostly black sharecroppers out of work:

It seems, therefore, that the agricultural policies, and particularly the Agricultural Adjustment program (A.A.A.), which was instituted in May, 1933, was the factor directly responsible for the drastic curtailment in number of Negro and white sharecroppers and Negro cash and share tenants. (Ibid.; italics in original)

Tell me again why FDR was such a great president.