Minimum Wage Hike Critics See Job Loss

A Democratic proposal to raise the minimum wage, which has been frozen at $3.35 an hour since 1981 for millions of workers, ran into heavy fire Wednesday from an Administration official and Senate Republicans.

They told the Senate Labor and Human Resources Committee that, unless the raise is restricted to some 1 million minimum-wage earners who work full time and head households, it will close first-job opportunities for hundreds of thousands of teen-agers.

It was the committee’s first hearing on a bill proposed by its chairman, Sen. Edward M. Kennedy (D-Mass.), to raise the minimum wage in three steps to $4.65 per hour by 1990, beginning with an increase to $3.85 next year.

Labor Secretary William E. Brock III, outlining the Reagan Administration’s opposition, said an increase would only aggravate a loss of 4.3 million low-wage--$6 an hour or less--jobs since 1983.

Net Gain in Jobs

During those four years, he said, the economy has had a net gain of 3.2 million jobs paying between $6 and $10 per hour and 12.5 million new jobs paying $10 or more.

“There’s a potential loss--worst case--of up to 800,000 jobs” from the 38% increase proposed in Kennedy’s bill, Brock said. “We’ve looked at 65 studies--by economists and researchers of every political stripe--and we can’t find a one that says it will not have a disemployment effect.”

Of the 7 million people now paid the minimum wage, only 15% or roughly 1 million are the primary wage earners in their families, according to data compiled by the Bureau of Labor Statistics. Almost two-thirds are part-time workers and a like proportion are under 25 years old.

“The stereotype of the teen-ager working a couple of hours a day after school for the minimum wage isn’t far off the mark,” Brock said. “As they remain in the work force, their wages rise. We need to make every effort to ensure that they have the opportunity to get this first job.”

Accepts Statistics

Kennedy did not dispute figures laid out by Brock and Sens. Orrin G. Hatch of Utah and Dan Quayle of Indiana, leading Republicans on the panel. Instead, he focused on the “1 million people who are working and are in poverty.”

“Our wage floor has buckled, and is not a fit foundation on which to build a life nor support a family,” he said. “The purchasing power of the minimum has eroded 27% since the last increase, and will continue to erode until Congress acts to restore it.”

Quayle said the most objectionable feature in Kennedy’s bill would permanently index the minimum wage to half the national average wage for non-supervisory hourly workers beginning in 1991. That average hourly wage was $8.92 in May.

“Indexing is a lousy proposal and I hope it will be discarded,” Quayle said.