| Show 10A Standard-Examin- Saturday September 17 1988 er Opinions Standard-Examine- r barbs Editorials I MUST RESIST THE TEMPTATION TO WAGE A CAMPAIGN OF CHEAP SHOTS AND DESPERATE INNUENDO Solicitors capitalize on good names of others How often has your evening tranquility been interrupted with the ringing of the telephone and the voice on the Your $25 from the other end saying: This is contribution will give you access to a variety show and the ? proceeds will help Besides being annoying these unwelcome telephone calls could be slightly on the raw edge of the law Utahns have been advised by the Utah Division of Consumer Protection that organizations bearing names similar to legitimate charities have been soliciting particularly concentrating on the Wasatch Front counties They are using several methods for making contacts some by mail but mostly through telephone calls The Consumer Protection Division is warning Utahns not to be intimidated by the aggressive approach and the hard-setactics or taken in because of the names of organizations that are similar to bona fide lawfully registered RATHER I SHOULD CONCENTRATE ON MY EXPERIENCE IN SUCH AREAS AS FOREIGN POUCY AND NATIONAL SECURITY ll ftWWOfteio charities ©rwtrsH Groups not ey include Cancer Fund of America Atlanta American Heart Disease National Animal Protection Tulsa Okla Walker Cancer Research Institute Washington DC and Pacific West Cancer Fund of Seattle g efforts reached the attenThe questionable tion of the proper state agency last month when Ogdenite Ruth Stevenson was suspicious of a sweepstakes offer from the Cancer Fund of America She did the right thing: She notified the appropriate officials and the local chapter of the American Cancer Society She was told that many people had been questioning the sweepstakes letter and the charity it is suppose to benefit Meanwhile another group representing a police alliance flooded the Salt Lake City area with telephone solicitations that included implied threats that the level of police protection would be diminished if contributions were not forthcoming Police associations that are affiliated with the Salt Lake City Police Department were the first to decry this type of g and especially the tactic of urging of people to e checks an illegal practice registered with the state but asking for mon- fund-raisin- fund-raisin- post-dat- Dixie Minson who directs the Utah Division of Consumer Protection confirms that she is fielding many complaints about these organizations with names similar to their legitimate and registered counterparts Minson suggests residents do the following when contacted: Insist that the solicitor provide the registration number and the percent of the donations actually going to the charity If there is a question her office should be contacted Telephone number is Salt Lake City 1 The office is located at 160 E 300 South 530-660- Should federal minimum wage be raised? New study shows few would lose jobs with higher rate The federal minimum wage has remained at $335 an hour since January 1981 despite a 36 ing As a result the percent jump in the minimum wage is now at its lowest level sinee 1955 after adjusting for inflation The sharp decline in the minimum wage has contributed to serious income problems for many American workers e miniDuring the 1960s and 1970s mum wage earnings generally lifted a family of three slightly above the poverty line Today such earnings leave that family nearly $2500 below cost-of-li- v full-tim- Legislation now before Congress would only partially restore the minimum wage to its traditional level At most the minimum wage would be increased to $455 an hour bv 1991 After adjusting for inflation this would still be significantly below its average value in the 19t0s and 1970s Though modest the effects of such legislation would provide needed income to millions of minimum wage workers many of whom — 30 percent — are poor or r and most of whom are adults Employers and some economists are trotting out their traditional argument: that a minimum wage causes dramatic job losses This argument proved invalid in the past and is especially dubious today Virtually all of the job loss estimates cited by opponents arc based on outdated studies of labor markets They substantially overestimate job losses that would likely occur from a minimum wage increase now 0 studies was conductThe best of these ed by economists of the Minimum W age Study Commission established b Congress in 1977 its economists found that a 10 percent increase in the minimum wage is associated with a percent decrease in teenage employment and a decrease of of one percent in the emplovmont of (20-2- 4 he economists adults year olds) young found no compcllingev idence of any job loss lor adults 25 and over But the job loss estimates of the commission stall' are now out of date They are based on labor market data through 1979 and do not reflect the important differences between today's near-poo- pre-198- 0 pre-198- one-quart- I low-wag- e Isaac Shapiro labor market and that of the 1960s and 1970s Fortunately a new study — conducted by Alison Wellington of the University of Michigan under the supervision of one of the commission’s senior economists — has replicated the work of the commission staff but with labor market data through 1986 The Wellington study indicates substantially smaller adverse employment effects than did the earlier studies Wellington's results indicate that a 10 percent increase in the minimum wage is associated with a drop of only about one half of percent in teenage employment opportunities (ie only one of every 200 teenage employment opportunities) and that it has no effect on the employment of adults Based on these results the estimated decrease in employment opportunities associated with the proposed minimum wage increase would be about 70000 jobs a fraction of the total labor force of 123 million The reasons for only modest job losses include Wage law could cost as many as 750000 Americans their jobs No matter how you look at it boosting the minimum wage will cost jobs How many Americans will lose their jobs if this happens? A National Chamber Foundation study based on historical data predicts that 750000 Americans will be put out of work by 1992 if the minimum wage rises from $335 to $465 1 the following: F ust since the current minimum wage is sub- stantially lower than in the past relatively fewer workers now work at or near the minimum wage A modest increase in the minimum wage is thus likely to have a smaller effect on the economy than in the past Second there is evidence of a possible shortage in the supply of teenagers The number of year olds rose in all but one of the 25 years preceding 1978 but has shrunken substantial in the Using different models studies by the Congressional Budget OITice and the Council of Economic Advisors have predicted a loss of between 500000 and 600000 jobs W hile these numbers may differ slightly they all agree that the impact on workers will be strong But the Center on Budget and Policy Priorities a liberal research group and frequent consultant to oigamcd labor predicts a job loss of only 70000 It claims that earlier studies were based on old data but its conclusions fail to give the whole story The study used by the CBPP does not address the total price tag for business When costs rise without a proportional rise in productivity an employer must act to offset them A l9 1980s I'Yesumably the effects of the minimum wage on teenage employment will be modest when the teenage population is declining Third 10 states now have higher minimum wages than the federal level including California at $425 an hour In addition the proposed legislae tion expands the exemption for small retail or establishments Both factors partially the economic effects of federal increases New studies as well as the unique characteristics of the current labor market suggest that the negative employment effects of the pending legislation are likely to be quite modest scr-vic- pre-em- low-wa- They would be greatly outweighed the many floor the wage restoring by positive benefits of t Isaac Shapiro is the senior research analyst at the Center on Htuiyet and Policy Priorities a nonprofit rescan h organization in Washington DC) University of Chicago study estimates that the effect of raising the minimum wage would result in a 2 IT percent rise in labor costs — a whopping $48 billion annually for American business This rise represents a cost increase “before” any workers arc laid off It the increases are not passed on through higher prices an employer may choose to cancel or postpone plans to hire new workers reduce employee work hours or lay off workers An employer might also choose to cut production or more fully automate the business This could mean a loss in newly created jobs as well as reduction in the overall number of jobs i he CBPP study also fails to address the effect on the economy The rise in unemployment would be accompanied by a rise in prices An increase in the level of prices means an increase in inflation The Federal Reserve Board of San Francisco has estimated that the current legislation would result in a 025 percent to 05 percent increase in the an- T Robert L Martin nual inflation rate over four to five years The social impact also is not addressed Workers who lose their jobs because of minimum wage hikes could choose to drop out of the labor force That means added outlays by federal state and local governments for additional welfare and other social programs We will be less competitive globally if the minimum wage is boosted High labor costs will make America less attractive to foreign as well as domestic investors Many new jobs w'ould be lost Higher prices for American-mad- e goods would make them less attractive in world markets causing sales to drop and the trade deficit to increase Worse a minimum wage increase would hurt most those its designed to help — low skilled and unskilled workers and teenagers For example the number of employed black teenagers increased by 64 percent between July 1987 and July 1988 During the same period unemployment among these youths the highest in the nation decreased from 331 percent to 318 percent due in large part to the stability of the minimum wage These are the people who will suffer most An increase in the statutory wage level will dry up jobs Since the last set of minimum wage increases we have seen greater automation and lower levels of personal services to customers accompanied by higher prices Youths seeking marketable skills necessary to rise in the labor force will be denied the opportunity And those deficient in even the most basic of skills will become virtually unemployable Since 1982 more than 16 million new jobs have been created due to the longest period of economic prosperity in our nation’s history Employment e is at an high while unemployment is at its second lowest level in 14 years The budget deficit and the trade deficits are both decreasing and inflation is moderate Raising the minimum wage would endanger all of this and won’t solve the problems of the working poor Eor once let's heed the predictions of countless economists and reject proposals that will cost Americans jobs (Robert L Martin is director of the Employee Relations Policy Center of the US Chamber of all-tim- Commene) |
