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Jewish World Review April 16, 1999 /30 Nissan 5759

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Econophone

Minimum wage: Yet another Republican retreat

(JWR) ---- (http://www.jewishworldreview.com)
EVERY SO OFTEN, without fail, the Republicans remind me why I don't join the party.

A recovering drug and alcohol abuser, living in the streets, recently told me the following story. One day, in desperate need of money, he went to the owner of a convenience store. The street guy pointed to the dirty, bottle-strewn parking lot and offered to sweep and clean the parking lot for $4 an hour. He said the owner looked nervous before turning down the offer.

My homeless friend countered with $3, and still, the man said, "No." So my friend went to another mom-and-pop store. "May I clean your lot for $3 an hour?" he asked. Again, "no." He went to four other convenience stores, each with a filthy parking lot. Each time, the owner said, "No."

Several owners said they could not legally hire him for less than the California hourly minimum wage of $5.75 an hour. The owners told my friend they "couldn't afford to take a chance," some no doubt assuming that he was an undercover cop out to bust them.

Armey
What does this have to do with Republicans? Leading Republicans, including House Majority Leader Dick Armey, say they will no longer oppose a minimum-wage hike.

"I believe it is a foregone conclusion that some type of minimum-wage increase bill will be approved in this session of Congress. Rather than fight the thing and have Republicans being dragged kicking and screaming to vote on the minimum wage, I say to my party, 'Why not take the lead,'" said Rep. Jack Quinn (R-N.Y.).

Excuse me? Why not?

How about the fact that Nobel laureate economist Milton Friedman said, "We regard the minimum wage as one of the most, if not the most, anti-black laws on the statute books." Friedman and the overwhelming majority of economists say that minimum-wage laws hurt the very people that proponents seek to help -- minorities, teenagers and female heads of families.

Or how about the 1987 New York Times editorial, "The Right Minimum Wage: $0.00"? The liberal paper urged the abolition of the minimum wage, arguing, "An increase in the minimum wage ... would increase employers' incentive to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers, and fewer will be hired."

How about the unemployment rate for black teens, age 16 to 19, which now stands at 30.1 percent? Before minimum-wage laws, the black and white teenage employment rates were about the same. After minimum-wage laws, however, black teens experienced greater unemployment than white teens.

Or how about when Congress raised the minimum wage from $4.25 an hour to $4.75 an hour? From third quarter 1996 to first quarter 1997 (when the rate kicked in), teenagers, blacks and women heading families all experienced greater unemployment. And this during a period of over-all job growth! Allen Reynolds, director of economic research at the Hudson Institute, writes, "Such a sudden rise in the national unemployment rate would be front-page news. But when only teens, blacks and single moms are affected, it apparently does not attract much attention or sympathy."

For over 30 years, my dad ran a cafe near downtown Los Angeles. Whenever Congress hiked the minimum wage, I watched my parents sit at the kitchen table with pen and pad and make decisions. The goal of hiring a new dishwasher? Not now. Raises for the waitresses? Postponed. Prices? Must raise them, even though this always triggered several weeks of business falloff.

Studies show that most people hired at the minimum wage get increases within a matter of months. Many fast food executives started out flipping burgers. And the image of a guy with a family of four working a minimum-wage job? It is just that -- an image. Most minimum-wage earners are teens and secondary household wage earners.

Republicans, by abandoning principle in supporting higher minimum-wage laws, seek to reposition themselves as "compassionate." But, by doing so, the GOP hurts the very people most likely to call them "mean-spirited."

True compassion does not lie in drop-kicking principles, especially when the result harms people. True compassion lies in making a credible, persuasive case for opposing minimum-wage hikes. True compassion lies in maintaining the course, even if it takes a while before critics appreciate the journey.


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