MARCELINO GUEVARA, who started out in the restaurant business as
a dishwasher 25 years ago, today manages an establishment in
He makes a point of paying his employees more than what he first
earned -- minimum wage. "Otherwise these people just wouldn't make
it," he says.
Restaurants, from fast-food chains to more upscale eateries,
employ more than a fourth of the nation's workers who receive the
$4.25 an hour. Almost 5 million Americans earn minimum wage or
less. And according to the latest federal census, 20 percent of
that group lives in poverty -- many receiving supplementary aid,
such as food stamps or subsidized housing.
Behind these statistics lies a central debate emerging in the
fight over whether to raise the nation's minimum wage: Is the
current rate so low that it is adding to the nation's underclass --
and thus to the number of people on the public dole? Or does an
increased minimum wage reduce the number of jobs available?
The debate arises at a time when Congress, in its drive to
reform welfare, is looking for ways to move more Americans away
from dependency on federal assistance.
Not surprisingly, President Clinton's call for a 90-cent hike in
minimum wage -- to $5.15 an hour -- has drawn the strongest support
from the lowest tier of the work force, including those who pump
gasoline and flip hamburgers. The average minimum wage earner is
over 20 years old and brings home half the family's earnings --
$8,500 a year.
Yet they are not alone in their support: The latest poll by the
Times Mirror Center for the People and the Press found that 79
percent of respondents favored the idea.
Hike could slow hiring
But there is also plenty of opposition. The National Restaurant
Association (NRA), for one, is lobbying against what it calls
"raising wages by government fiat." It argues a high rate would
impinge on the food service industry's ability to hire workers.
"In our industry, minimum wage is a starting point," says NRA
presdient Herman Cain. "It allows restaurateurs to hire millions of
people and give them the opportunity to acquire work skills and
help them climb a clearly delineated career ladder." He cites a
Congressional Budget Office study that found 63 percent of those
earning minimum wage will earn higher wages within a year.
The White House is worried about growing GOP opposition to its
plan. To Rep. Jim Saxton (R) of New Jersey, vice chairman of
Congress's Joint Economic Committee, Mr. Clinton's call smacks of
He accuses the president of trying to "to reap political gain
from an issue that affects the economic well-being of many young
people who are seeking first-time job opportunties." The bottom
line for him: While a higher minimum wage may increase the number
of job seekers, "it will stifle the number of job opportunities."
Like many others in his party, Sen. Richard Lugar (R) of
Indiana, a 1996 presidential candidate, says the higher rate would
be a burden on employers and would make the entry in the nation's
work force "more difficult" because higher wages would increase
competition for jobs. …