MINIMUM WAGE HIKEEVER since the Fair Labor
Standards Act in 1938 set up a federal minimum wage, there have been
few public issues in the U.S. on which there was so much agreement on
the rightness of the goals and so much disagreement on how to get
there. Last week the debate was fueled anew. In his economic message,
President Kennedy urged Congress “to raise the minimum wage
immediately to $1.15 an hour and to $1.25 within two years.'' The
President also recommended that the Fair Labor act be broadened to
include “several million” workers not now covered, basically
those in retail trade and services. Many businessmen are against an
increase at this time. The unions are, as expected, solidly for a
higher minimum. Says A.F.L.-C.I.O. President George Meany: “If an
enterprise cannot survive except by paying wages of 75 or $1 an hour,
I am perfectly willing for it to go out of business—it's not worth
saving at that price.” As usual, the debate is likely to focus
most sharply on what workers are to be included on the minimum-wage
elevator, rather than on the elevator's rate of ascent. While hourly
wages under the law have been hiked four times from the original
minimum of 25 in 1938 to $1 in 1956. coverage has never been expanded,
in fact has slightly contracted. The minimum level has seldom reached
half the average U.S. hourly wage, now $2.32. but fewer than one-half
of the 50 million U.S. workers privately employed are now covered by the law. Among those not
covered: retail clerks, farm hands, seamen, and service employees, who
earn much of their income in tips. The Administration will probably
suggest that coverage be extended to an additional 3,000,000 employees,
chiefly in the retail and service trades—fastest-growing sector of the
U.S. economy. In so doing, it will run smack into the biggest foes of
extending minimum-wage coverage: retail stores, hotels and restaurants,
all of whom use much part-time, low-wage help. By lumping his minimum-wage proposals in with his anti-recessionary
measures, Kennedy gave critics a ready argument. They contended, with
reason, that a recession is the worst time to tinker with wages:
“You've already got unemployment and depressed areas —why make
both worse?” Says University of Chicago Economist Yale Brozen:
“Every time the minimum wage has been increased, unemployment of
the unskilled, those covered by the increase, has increased.'' Brozen
cites a study of Florida counties after the 1956 boost. For the twelve
months of that year, employment in counties paying low wages dropped
1%, v. a rise of 5% in high-wage counties.
