November 14, 1999

Congress Uses Kabuki in Higher Minimum Wage Fight

The annual kabuki theatrics by Congress over the minimum wage keeps alive the ancient Japanese conflict between humanity and feudalism --- except Republicans and Democrats have difficulty discerning good guys and villains.

At issue is how much how soon to increase the present minimum wage of $5.15 per hour.

Senate Republicans offer $1 in three increments over a 28- month period. House Republicans are amenable to a dollar but would cut taxes $3.7 billion a year for small businesses. The tax relief would help compensate for the added wage-rate expense plus unemployment taxes, health insurance, pension set-asides, work-day restrictions and other off-line work costs.

President Clinton denounces the proposal as “a cynical tool to advance special-interest tax breaks.” He vows to veto any plan that includes a tax cut. Sen. Teddy Kennedy is incensed with the Republican plan and “demands” a dollar increase in two bites over a 13-month span. He would comprise, grudgingly, to $1.3 billion a year in business tax cuts.

Democrats have waged class warfare for 62 years, fought with borrowed money and with a big kiss from its poorest victims.

Strangely, the roles of humanity and feudalism have descended reversibly on the two political parties.

Ever since Franklin D. Roosevelt, Democrats have claimed the mantle of compassion for the poor, the “working man” and minorities. Let’s hear no more malarkey about special interests.

Republicans have been tagged as feudal because of their reliance on private capital, private enterprise and private responsibility.

Ironically, the most feudal society is that created by the minimum wage law. It started in 1938 at 25 cents per hour. Its most conspicuous effect has been creation of a permanent underclass – principally inner-city African-American young men - - denied entry-level jobs.

Steady increases in the minimum wage rate haven’t materially helped under-educated under-skilled under-motivated people. Indeed, the problem seems to have grown.

The liberal lament is that a family of four can’t live on $5.15 per hour. True. In fact, this assumed family can’t live on $6.15 per hour.

The 20 percent of full-time heads of households working for minimum wage – the “working poor” – receive an “earned income” government bonus boosting their real wages to $8 an hour. Note that this humane treatment was initiated by President Bush.

Mandated wages are a cruel hoax. If earning power can be increased solely with the stroke of a pen, we should legislate a $50 per hour minimum wage. Then all of us could get rich flipping hamburgers.

Labor unions love minimum wage increases even though their lowest rates are five to ten times higher. When a floor sweeper gets a raise equal to that of a machine oiler, the latter has to get a differential increase --- and so up the line until everyone has received an un-negotiated pay raise.

Any wage that increase costs without an increase in output is a delusion. It simply devalues money.

Before you disagree, ask yourself how much a 10-cent loaf of 1938 bread costs today. Or a good pair of shoes at $3.50. Or a $600 automobile. Or a $5,000 three-bedroom house.

In addition to diluting purchasing power, wage mandates speed conversion of routine jobs to automation. Both blue-collar and white-collar workers are affected.

Programmed machines never get tired, go on strike, or take coffee breaks. Computers keep inventory, order supplies, balance the books, send invoices, pay bills and write paychecks.

Even service jobs – which are said to be the last bastion against technology – are affected. We serve ourselves at fast- food restaurants, pump our own gasoline, carry household trash to the curb and sort it into recycle compartments, push ATM buttons to get our bank money, and tap telephone keys to eliminate receptionists.

We cannot repeal the law of gravity or of supply-and-demand. But we can eliminate the regressive minimum wage rate before it wipes out the middle class and creates a chasm between the very rich and the very poor.

PARTING SHOTS

Clinton told an ABC-TV interviewer last week that his impeachment was only “a personal matter,” and he was proud of having “defended the Constitution.” That loud noise you hear is Thomas Jefferson spinning in his grave.

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Fie on Al Gore for ridiculing George W. Bush who did not know the names of four obscure heads of states. Last week, Gore told a radio interviewer he had just been talking to Ion Sturza, “prime minister of Moldova and an old friend.” If so, Sturza failed to mention he had been ousted by the Moldovan parliament. By the way, where is Moldova?

By Lindsey Williams, columnist for Sun Coast Media Group newspapers