Minimum Wage Increases on Monday, Labor Already Pressing for MoreKAREN BALL , Associated Press
Apr. 1, 1991 3:34 PM ET
WASHINGTON (AP) _ The minimum wage increases by 45 cents an hour on Monday to $4.25, but labor advocates already are pressing for more.
About 3 million Americans earn the minimum wage, and millions of higher- paid workers may benefit as well when the minimum increases from $3.80 an hour this week. But workers' advocates contend the increase still is far too paltry to lift low-wage workers out of poverty.
''They can't support a family on this and in many cases can't support themselves,'' said Rudy Oswald, chief economist of the AFL-CIO.
The 14.2 million-member labor federation has called for boosting the minimum wage to $5.75 an hour by April 1994. And Sen. Edward M. Kennedy, D- Mass., has promised that his Senate Labor and Human Resources Committee will take up minimum wage legislation during the current Congress, either this year or in 1992.
Business executives dismiss the need for another increase in the minimum wage, and the White House has indicated it would likely be opposed to another increase.
''I don't know what kind of dream world they're in,'' John Meritt, a senior vice president of Hardee's restaurants, said of those calling for another minimum wage increase.
''When (the cost of) your labor component goes up, it ultimately gets passed on to the consumer,'' Meritt said. He added that if another wage increase were enacted soon, ''We'd probably be out of business at some point.''
Kennedy called Monday's 45-cent raise an ''April Fool's increase, well below what low-wage workers deserve.''
''Just to restore the ground lost in the Reagan years, the minimum should be $5.15 an hour today,'' Kennedy said. Congress should close the gap and end ''this continuing exploitation of the working poor,'' he said.
White House spokesman Stephen Hart said the administration could not take a stand on legislation that had not been introduced, but he noted the Bush administration has long maintained that an increase in the minimum wage translates into job losses that hurt the economy.
''Our position on the minimum wage has not changed,'' Hart said.
The increase in the minimum wage from $3.80 an hour to $4.25 is the second step of a two-part increase Congress enacted in 1989 after a long and fierce battle with the White House. President Bush had vetoed an earlier version he considered too hard on businesses.
The first step of the increase took effect a year ago, when the minimum wage went from $3.35 an hour to $3.80. It was the first increase in nearly a decade.
The rising minimum wage also could help push up the pay of millions of higher-paid workers by putting pressure on employers to boost their wages by comparable amounts.
The 1989 law also created a below-minimum ''training wage'' for teen-agers holding their first jobs, but Labor Department figures indicate hardly any businesses are using it. On Monday, the training wage rises from $3.35 an hour to $3.62.
For a minimum-wage employee working 40 hours a week, Monday's increase means a raise of about $18 a week, or a weekly income of $170.
The $8,500 annual income for a fulltime minimum-wage worker would be about $1,400 less than the poverty line for a family of three, or what the government calculates a family must have to pay for basic needs.
Oswald, the AFL-CIO's economist, said that, historically, the minimum wage rose periodically to stay at about 50 percent of average hourly earnings. But the minimum wage slipped below the 40 percent level during the Reagan and Bush administrations, he said.
Hourly workers in American now make an average of $10.20 an hour.
Oswald said that in order to get the minimum wage to half of the $11.50 average that hourly workers are expected to earn in 1994, Congress should increase it by 50 cents an hour every year for the next three years.
Peter Eide, manager of labor law at the U.S. Chamber of Commerce, said the AFL-CIO is pushing another increase in the minimum wage because it could help boost paychecks for union members by forcing businesses to dole out similar increases to higher-paid workers.
''I discredit everything the AFL says about the minimum wage,'' Eide said. ''The AFL wants the minimum wage to be as high as it possibly can be because that's the floor for their contract negotiations.''
To back up their call for further increases in the minimum wage, labor officials note that women who earn the minimum wage often are forced to apply for food stamps to support their children.
But Meritt, the Hardee's executive, said that because wage increases result in higher prices, workers don't benefit.
''What it amounts to is a cruel tax on these people,'' he said.
Hundreds of special exemptions from the minimum wage law exist, including those for some farm workers such as tobacco leaf harvesters, casual babysitters, newspaper delivery workers, amusement park employees, wreath makers, employees at small radio stations in cities with fewer than 25,000 residents and mollusk and crustacean harvesters.
End Adv for Mon AMs, April 1