Pay Raise for the Poor
FINALLY it appears that, after nearly a decade, America's lowest-paid workers will get a wage hike. Congress and the White House have announced a deal on raising the minimum wage. President Bush vetoed a minimum-wage bill in June, but he says he can live with a bargain struck last week. That's good news. The minimum wage has been stuck at $3.35 an hour since 1981, while inflation has steadily eroded its buying power.
The issues that provoked Bush's veto were the ultimate level of the phased-in raise (Congress wanted $4.55 over three years, Mr. Bush $4.25) and Bush's desire for a six-month subminimum ``training wage'' for new hires. The president said the higher rate would be inflationary and would cost unskilled jobs. The training wage, he argued, would encourage employers to hire disadvantaged workers, especially black teenagers; but congressional Democrats worried that a subminimum wage would be misused by employers.
Both sides gave some ground and came up with a plan that seems fair and feasible. Congress accepted Bush's $4.25-an-hour cap, but it will phase in over two years, rather than three. Congress also agreed to a subminimum wage of $3.61 an hour, but only for 16-to-19 year olds in their first jobs. The lower wage applies for just three months, or for six months if a teenage worker is involved in a genuine training program acceptable to the Department of Labor.
Predictably, some employer groups are complaining. But their main contention - that a higher minimum wage actually hurts unskilled and inexperienced workers by pricing them out of the job market - would be more persuasive coming from people with greater standing to speak for the working poor.
By some accounts, the Bush administration felt obliged to compromise on raising the minimum wage because of its enthusiasm for lowering the capital-gains tax. Chalk one up for trickle-down politics.