Skills and Wages

* Helping to raise the wages of those people who are stuck at the bottom of the income scale is a noble and worthwhile pursuit (“Living Wage Advocates Take on NoHo Project,” Dec. 12). But the plan to force employers to pay a “living wage” of $8.97 per hour to low-skilled workers is off target and would hurt the entry-level employees the Valley Jobs Coalition seek to help.

Mandating wage hikes--either through federal decree or some complex scheme--does not ensure that the people at the bottom rung of the ladder will have an easier climb out of poverty to higher paying jobs. In fact, it makes things worse: A University of Wisconsin study showed that welfare mothers in states that raised the minimum wage stayed on welfare 44% longer than welfare mothers in other states.

Before a low-skilled work force can earn higher wages it needs skills. Economic reality requires that employers pay workers based upon their skills, not based on need. As President Clinton said, “The wage gap is largely a skills gap.”

Because employers hire based upon skills, mandated wage hikes force employers to change their hiring profile; this favors workers with better skills. A Boston University study concluded that following mandated wage increases, “the competition from higher quality workers makes low-skill workers worse off.”

If we want to help low-skilled workers out of poverty we must focus on skills. Forcing wages up through any other means will only result in displacing them from the work force.

THOMAS K. DILWORTH

Director of Research

Employment Policies Institute

Washington, D.C.