Big Minimum Wage Hike Would Cause Job Loss

By Knapschaefer, Johanna | THE JOURNAL RECORD, June 14, 1989 | Go to article overview
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Big Minimum Wage Hike Would Cause Job Loss

Knapschaefer, Johanna, THE JOURNAL RECORD

An excessive increase of the minimum wage would hurt small business and cause the loss of about 650,000 jobs, said U.S. Secretary of Labor Elizabeth Dole.

She was the keynote speaker for the third annual Governor's Conference on Small Businesss and "Buy Oklahoma" Trade Fair which began Tuesday at the Myriad Convention Center and is scheduled to end today.

Shortly after Dole made her statements on the minimum wage in Oklahoma City, the bill was received at the White House at 1 p.m. EDT, and President Bush signed the veto message just 55 minutes later, aboard Air Force One en route from Wyoming to Lincoln, Neb.

The bill, proposed by Sen. Edward Kennedy, D-Mass., passed the Senate on April 12. The bill proposed increasing the minimum wage to $4.55 an hour with a 60 day training wage for first time employees. Kennedy argues that a six month training wage is unecessary since it doesn't take six months to train people in minimum wage jobs.

"On the one hand we're saying to young people that we want to help you to create jobs. . . and on the other hand we're snatching them away," Dole said to the conference.

"I think almost every economist would agree that if you increase labor costs, you decrease the opportunities for work."

Dole said President Bush compromised up front with a proposed increase from the current $3.35 an hour wage to $4.25 an hour.

"He would have gone 70 percent of the way in legislation introduced by Kennedy, if there an was an effective training wage of six months to protect against the bulk of the lost jobs," she said.

Such a training wage would apply to any person who was hired for the first time at a particular business, she said.

"Employers aren't going to use a training wage if they have to go find out if this the first time a person has ever held a job anywhere in this country."

Criminal penalties included in compromise legislation would be vigorously enforced to prevent employers from hiring first time employees at a sub-minimum training wage and laying them off after six months, Dole said.

"But I think the marketplace itself would take care of that because the workforce is growing so slowly now, at 1 percent a year, that employers are competing for workers."

Under the President's proposed increase, Dole said 150,000 to 200,000 jobs would be lost.

"If you increase the minimum wage at all, it costs you jobs," she said.

"The President is trying to be responsive to people who think there should be an increase, since there hasn't been one in eight years, while trying to protect against lost jobs," she said.

On issues of importance for the future of small business in America, Dole said her most pressing responsibility was to insure that America has the best skilled work force in the world.

Another priority is creating a work environment where work and family are complementary, not conflicting goals, Dole said.

Projections show that 60 percent of new entrants in the workforce between now and the year 2000 will be female, Dole said. To attract workers, government and business need to consider child care, parental leave and flexible work schedules.

Now 57 percent of women with children under the age of six are working, Dole said.

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