Role of the Poor in Presidential Plans

By now almost everyone ought to know the sad truth that the rich got richer and the poor poorer during the Reagan-Bush years. To put it another way: The rising economic tide of the 1980s lifted the yachts, but the rowboats foundered.

Among the front-runners, President Bush is still pushing most of his same old programs that he continues to predict will help the tide rise some more. But he rarely mentions the poor in their sinking rowboats. And he opposes an increase in the minimum wage, a traditional method we use to give them a boost

Arkansas Gov. Bill Clinton hasn’t ignored the poor, but he is concentrating mostly on the needs of middle-class Americans because, as he repeatedly observes, they are working harder and harder for less and less money.

But it is also smart politics for him because the middle-class is much more likely to vote on Nov. 3 than the poor.

His major campaign proposal designed to help those struggling to survive at the bottom of the economic pile is to index the minimum wage so that it will at least keep pace with inflation. Unfortunately, as important as it is, he hasn’t stressed the idea.

The odds are good, though, that his goal will be achieved if he is elected. Sen. Ted Kennedy (D-Mass.), head of the Senate Labor Committee, said last week that he will introduce legislation in the new Congress to “make the minimum wage a living wage,” and he’s confident it will pass.

Raising and indexing the minimum wage won’t eliminate poverty. It is a blunt instrument that doesn’t provide any more help for a poverty-stricken person with three kids than it does for a single teen-ager working to get a few extra bucks for entertainment.

It’s important to note, however, that more than two-thirds of those earning the minimum wage are not teen-agers. More than 3 million workers earn the minimum wage or less. Only a third of them are teens, mostly from low-income families. That means their wages are a critical part of the family income. The minimum wage law that was adopted as part of President Franklin D. Roosevelt’s New Deal in the 1930s is the most readily available legislative tool to help the truly poor.

It should be raised by Congress at the national level so that individual states don’t try to keep their own minimums low to attract businesses from states that have a higher rate.

Kennedy has not proposed a specific new minimum wage that is now only $4.25 an hour. Keep in mind, though, that to push a family of three just up to the poverty line, the breadwinner must have a minimum wage of $5.64. hour. The government classifies that family as poverty-stricken if it makes $11,800 a year or less,

If Congress acts to raise the minimum wage, it must also be indexed so that it rises with inflation, as Clinton proposes. The minimum wage was not raised one cent during eight years of Ronald Reagan’s Administration.

Bush opposed boosting it too. But the President finally gave in when Congress agreed to fix a lower rate for new employees so they could get on-the-job training.

That concession to Bush wasn’t very useful to his favorite constituents, the business leaders. A recent study by economists at Harvard and Princeton showed that only 6% of the companies surveyed took advantage of the sub-minimum wage.

Harvard Prof. David Card, one of the economists who conducted the study, concluded that the sub-minimum Bush demanded was a trade-off. A higher wage means lower turnover and less recruiting, which costs money. Lower wages means a higher turnover and more recruiting, which costs about the same.

The need for using the minimum wage law to help the poor, despite its flaws, is brutally obvious.

Each day’s paper gives us tragic stories of individuals and families in distress. And there is enough statistical evidence of the need to stuff a horse.

Childhood poverty, for example, is appalling. More than 21.8% of all youngsters under the age of 18 were living in poverty last year, and 45.9% of African-Americans under 18 were in the same fix, according to a recent study by the liberal Economic Policy Institute based on data from the Census Bureau.

While incomes of the richest 1% of Americans soared 63% from 1980 to 1989, wages of workers in the lowest 20% income bracket dropped 12%, and wages of those at the bottom went down even more.

Ever since the law was first enacted 57 years ago, most employers have been fighting it, first the law itself and then any increase because they claim it only reduces the number of low-wage job openings and so punishes those it is supposed to help.

Advocates for the poor, unions and others have countered with figures of their own showing the opposite is true. Their argument was bolstered by recent studies by economists at Princeton and Harvard universities that show hiking the minimum wage does not force employers to eliminate jobs.

The professors found that unemployment did not increase after the last minimum-wage hike and, in fact, it decreased in several areas of the country. It has gone up since, but there has been no further increase in the minimum wage for employers to blame.

While Clinton hasn’t talked enough about America’s poor during the campaign, that won’t matter if he becomes President and pushes his minimum-wage proposal through Congress.

It would be disgraceful to wait another nine years to increase the minimum wage, as we did from 1980 to 1989. The best way to avoid repeating that dreadful mistake is to make sure that the minimum wage is linked to inflation, which Clinton says he wants to do. For the sake of America’s poor, he better mean it.