Show Center enter THE VOICE OF BUSINESS A d bill i i with good intentions By Dy Richard L L. L Lesher President of the Chamber of Commerce of the Ul United ted States Are you getting tired of noble noble- sounding proposals from the politicians that never seem to turn out right in practice Well heres here's another one for far you The Fair Labor Standards Standards Standards Standards' Stan Stan- dards dards' Amendments of 1975 introduced by Representative John li H. H Dent D On the surface this bill would raise the minimum wage for formost formost formost most workers to 3 or on on January 1 1977 Thereafter the rate would go up automatically with rises in the Consumer Price Index with an added one percent bonus increase each time it does THE TILE BILL DILL would also specify a rate for overtime work over 40 hours a week of 25 times the base rate its it's now 15 And tipped employees waiters and waitresses etc would receive the full minimum wage in addition to their tips Under the present law employers may mayuse mayuse mayuse use tl tips to offset 50 percent of the minimum wage Sounds alluring doesn't it After all how can anybody be against a raise for those at the thelow thelow thelow low end of the wage scale nUT HUT IN practice such laws accomplish nothing at best and at worst can actually hurt those they are supposed to help To see why take a close look at the major premises of this bill 1 1 Income for workers at the bottom of the wage scale can be raised by a law requiring employers to pay more What if the employer doesn't have the money The government government govern govern- ment isn't proposing to give it to him And with labor costs ac act accounting accounting counting for 70 to 80 60 percent of the cost of most products and services most employers would have difficulty swallowing a big increase Such a boost would increase production costs casts without increasing productivity thus raising prices and contributing to inflation OF COURSE counSE there is another alternative for the employer H He can try to maintain production with fewer people In this case it will be the low- low skilled who are the first to be laid off An employer just cant can't pay workers more than their work is worth If the official minimum wage rate is lower than the rates established by the marketplace then it doesn't do much good or much harm either except to make the least skilled even less attractive to potential employers 2 Nobody should have to work at an income below the poverty level THE TIIE OFFICIAL poverty level is calculated for torn a family of four tour What about the single teenager who's living at home and looking for his first job He or she needs experience and training But an employee who must be trained is not able to pull his weight immediately If employers are forced to pay the unskilled as much as as' as it would cost them to hire the skilled then obviously they'll hire the skilled in preference That's why we have such high unemployment rates among the ranks of teenagers 3 High enough minimum rat rates s for ov overtime will encourage encourage encourage en en- courage courage employers to hire new peo people le rather than working their present employees longer MOST lOST OVERTIME work is a sometime thing it comes and goes Even at very high legislated rates for overtime pay it still wouldn't pay al' al an employer to add new time full employees to his staff just to handle a seasonal peak or temporary backlog The effect of this kind of law is really counterproductive If the cost cast of overtime pay is especially high then the work will be given only to the most highly skilled most productive employees employees either either that or the overtime hours will be eliminated altogether and services reduced Non NOR DOES the damage end with the above list of vantages Worst of all this bill would start a rapidly escalating cycle of inflation that could only end in a spectacular collapse If the minimum wage goes up automatically with the CPI when prices rise then most other pay would rise too to maintain differentials up the line An automatic rise in labor costs would cause another rise in prices and so on Representative Dent is walking through a powder mill with a lighted match looking for ways to be kind to the workers there |