Reich to delay request to raise minimum wage He bows to pressure from White House

October 30, 1993|By New York Times News Service

WASHINGTON -- Under pressure from the White House, Labor Secretary Robert B. Reich said yesterday that he would delay until next year his plans to recommend a higher minimum wage.

Two weeks ago, Mr. Reich said that by the end of October he would recommend that the minimum wage, now $4.25 an hour, be increased by about 25 cents. But White House officials warned him immediately afterward that such a move would be unwise because it could antagonize business leaders at a time when President Clinton needs them for his health care and trade proposals.

Mr. Reich said in a statement yesterday that "in light of the historic deliberations over health care" he had advised Mr. Clinton "to defer any decision on a minimum-wage increase until Congress has had further opportunity to consider the president's health care plan." He said he had advised the president to "revisit the issue next year."

Several administration officials said that calling for a minimum-wage increase now would only complicate efforts to win congressional approval of the president's health care plan because business owners are already worried that the health plan would raise their costs.

In an appearance at the National Press Club on Oct. 12, Mr. Reich said the increase in the minimum wage, when coupled with an increase in benefits like insurance, which are called for in the president's health plan, could actually bring the value of the overall increase to 50 cents an hour.

Mr. Reich said yesterday that after reviewing economic studies on the effects of minimum-wage increases, he had concluded that "the minimum wage could be increased moderately with no loss of employment." Business groups dispute this, however, asserting that wage increases translate into fewer jobs.

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