
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 11, 1995                   TAG: 9504180009
SECTION: EDITORIAL                    PAGE: A-6   EDITION: METRO 
SOURCE: BILL J. JAMES
DATELINE:                                 LENGTH: Medium

BUILD INCENTIVES INTO MINIMUM WAGE

REGARDING raising the minimum wage: Some small businesses have been interviewed by television, but has anyone representing government interviewed any small businesses? Does anyone really know what happens - not what some consultant or television commentator says will happen - when the minimum wage is raised?

We own two small businesses, and we start people out on the minimum wage of $4.25 an hour, which is the law. We usually raise this to $4.50 after 90 days. Forty-nine out of 50 people we hire aren't trained, so we spend our time educating them to work at our marts.

Have you ever trained someone to do a certain job? To begin with, the instructor and new trainee must be paid. When the instructor takes time to teach, what happens to the work the instructor is supposed to be doing? It doesn't get done. Thus, to teach a new employee costs $5.45 for the instructor and $4.25 for the new employee, which equals $9.70 an hour. Also, add what government is paid through FICA, Medicare, state-unemployment and federal-unemployment taxes, which we have to add to our payroll each year.

When the federal government raises the minimum wage, it takes away the employee's incentive to work and learn more about the business. Consider: The current minimum wage is $4.25 an hour. A raise of 45 cents is proposed, which will bring it to $4.70. (In a year, it may be raised again, to $5.25.) What happens to employees making $4.75 an hour when a new, untrained person is hired at $4.70? This creates a heck of an environment to work. The last time government gave a raise to minimum-wage workers, it took us about 21/2 years to get employees used to working and learning for a raise.

How is a minimum wage of $4.70 going to help a person earning minimum wages when the retailer is going to have to raise prices on products to compensate for the higher wages he's going to have to pay?

I suggest that before the minimum wage is raised, our representatives need to go to their corner service station, deli or convenience store, and talk to the small-business owner. If they're too busy to do this, then they shouldn't represent the American people. When they pass legislation and create laws, they control what honest, law-abiding people live by. They should know what the real world is like, not what it's like when they play golf.

If there must be a government minimum wage, I suggest that it be done on incentives. For example, when an employee has been working at the same business for one year, make the new minimum wage $4.75 an hour. Then at the end of two years, $5.25 an hour. This gives employees an incentive to work better and learn about the business. Also, it would help them be happier because they would have pride in what they earn. That's better than the federal government giving them a raise for political reasons!

Bill J. James, of Bristol, owns B.J.'s Mini Marts, Inc.

by CNB