Apres Nous, Le Deluge

January 16, 1995|By ROBERT RENO

NEW YORK — New York. -- Newt Gingrich's ''Contract With America'' did not contain a promise to abolish the minimum wage and for very good reasons.

It would have been damn hard to put a human face on a legislative program that promises to drive people off welfare and into jobs while simultaneously guaranteeing that those entry-level jobs would pay less. More important, there is an easy way to kill the minimum wage without leaving any fingerprints. You simply don't raise it to keep pace with the general level of wages or with inflation. Since the federal minimum wage hasn't been increased since 1991, it is already in the process of becoming irrelevant. It is being reduced every year.

If it's neglected long enough, it will become meaningless because nobody will work for it. In 1970, the minimum wage equaled 54 percent of the average factory worker's earnings. Now it's close to 30 percent and falling.

Corporation presidents, in the same period, have seen a similar widening of the gap between their earnings and those of people on their factory floors. It's a trend that, hastened along by the tax cuts for the wealthy now certain of passage in Congress, could eventually lead to patterns of income distribution resembling those of 17th-century France.

The Clinton administration is considering asking for an increase in the minimum wage but already leading Republicans in Congress seem to have howled the idea down with a vehemence that suggests these people can't have the slightest idea of what it's like to live on $14,875, which is roughly what you get if you work 35 hours a week for the current federal minimum wage.

The last time they raised the minimum wage there was a similar amount of noise. Opponents of the minimum wage always trot out teams of trained economists, none of whom work for the minimum wage, who, like dutiful circus ponies, ''prove'' that raising the minimum wage ''destroys'' jobs. These are many of the same people who can ''prove'' that a tax on capital gains destroys jobs and so preserve the delusion that they only want what's best for working people and that they are the true friends of the working poor and blah, blah, blah.

Here's what they don't tell you. The hard evidence of job massacres following previous increases in the minimum wage is difficult to come by. And increases in the minimum wage can actually create good jobs. If, for instance, an employer feels forced to replace an unskilled worker with a machine, who's going to build the machine, service it, operate it? What job-creating factors are at work when the overall economy becomes more productive as a result? Meanwhile, a lot of people doing the least rewarding jobs in America will be slightly better off.

If the economic future of this nation, as Mr. Gingrich would suggest, depends on giving tax cuts to families making $200,000 a year but cutting the real wages of people making $14,875 a year, then indeed the post-industrial, post-welfare age is going to be a place for Charles Dickens even if Mr. Gingrich's orphanage-building program never gets off the ground.

But let's not get sentimental. Forget about whether it's fair or not. There are real costs and real risks in not protecting the buying power and economic security of the working poor.

Not the least of these is that it reduces incentives for the dependent population to go to work. Isn't that what everybody wants them to do?

Robert Reno is a columnist for Newsday.

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