President Bush supports raising the minimum wage to $4.25 an hour - if it is phased in over three years and if a lower "training wage" of $3.35 an hour is allowed for new employees, U.S. Labor Secretary Elizabeth Dole said Friday.
That doesn't totally please either the chairman of the Senate Labor Committee, Edward Kennedy, or its ranking Republican, Orrin Hatch of Utah.Kennedy has introduced a bill to raise the minimum wage from the present $3.35 an hour to $4.65 an hour. Hatch prefers no minimum wage at all, saying it destroys jobs and that the poor would be better helped through an earned income tax credit.
The Bush administration consulted extensively with Hatch about the minimum wage before its decision, including a meeting Thursday in the White House with Dole and Vice President Dan Quayle.
So when Dole outlined the administration's stance for the Labor Committee on Friday, Hatch and Kennedy could both find some statements to console them - but not completely.
Responding to Kennedy's complaint that the minimum has not been raised in eight years and that $3.35 an hour is not a "living wage," Dole said the president would support raising it by 30 cents a year for three years until it reaches $4.25 an hour.
Hatch told the Deseret News that Bush will veto any minimum wage higher than that and any minimum wage that also does not have a lower "training wage" of $3.35 an hour attached to it.
Dole also consoled Hatch with extensive data supporting his contention that the minimum wage is at best "a highly ineffective means of helping the poor (and) at worst, it destroys hundreds of thousands of jobs for the unskilled and inexperienced workers in our society who need these entry-level opportunities."
To help save some of the jobs that might be otherwise lost by increasing the minimum wage, Dole said the president will insist on a "training wage" of $3.35 per hour that could be paid to all new employees for their first six months, whether they have ever held another job or not.
Hatch said Kennedy appears to be willing to accept a training wage of some sort, but may want to allow it for only three months and allow it to be used only once in an employee's lifetime.
"But we consider that a victory. I think he's more willing to compromise because figures show raising the minimum wage to $4.65 an hour would cost the nation as many as 800,000 jobs," Hatch said.
"In Utah alone, it would cost 12,000 jobs. . . . A lot of businesses would figure they could do without a lot of jobs they now offer. Already, a lot of small-business owners figure they can't afford to hire a young person to help out sothey end up working 15 hours a day themselves."
Part of the administration's proposal is to exempt from minimum wage laws any small business that grosses less than $500,000 a year.
Dole said that more urgent for the administration than raising the minimum wage is finding a way to reduce the "skills gap" - the situation where most new jobs require significant training or college work, but most unemployed people have no such skills.