THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, August 2, 1996 TAG: 9608020508
SECTION: FRONT PAGE: A2 EDITION: FINAL
SOURCE: KNIGHT-RIDDER NEWS SERVICE
DATELINE: WASHINGTON LENGTH: 68 lines
By Saturday, Congress is expected to grant a raise to the 3.7 million U.S. workers who earn minimum wage. In the first phase, to go into effect Oct. 1, workers would earn $4.75 an hour, up from $4.25. A second raise, which would become effective Sept. 1, 1997, would bring the wage to $5.15 an hour. The bottom line: When the second increase goes into effect, a full-time worker who makes minimum wage will earn $36 more a week. But business groups say the increases will mean the loss of up to 400,000 jobs.
Nancy Shipley, 33, is a single woman who owns a cat and works as a janitor in Lansing, Mich., at the minimum wage of $4.25 an hour.
She is looking forward to a raise, now that Congress is about to boost the minimum wage to $4.75 on Oct. 1, and to $5.15 on Sept. 1, 1997. The wage increase is expected to clear Congress by Saturday, now that House and Senate negotiators have agreed on a final bill. The House and the Senate are expected for vote on the final bill by Saturday. Then it would go to President Clinton to be signed into law.
To put it in perspective, the extra 90 cents an hour amounts to about $36 a week for a full-time worker.
``That would be really nice, I tell you,'' Shipley said. ``I have a student loan to pay for. Yeah, it's kind of tough. I could probably save a little bit of money, possibly go back to school, maybe get a car. I'm working at the job I have now because I had some personal problems and had a bad employment history. So I'm doing this to get a better employment record.''
Shipley is one of about 3.7 million Americans who make the minimum hourly wage. Most of them, 63 percent, are women. Most are young; 54 percent are under age 25 and 31 percent between 16 and 19. And 39 percent failed to finish high school, according to the Bureau of Labor Statistics.
They work at menial jobs, and 4 out of 10 of them bring home their family's only paycheck, according to the Department of Labor, even though 63 percent are part-timers.
President Clinton led Democrats in pushing Congress to raise the minimum wage partly because inflation has cut the value of these workers' pay by 29 percent since 1979 and by 50 cents an hour since it was last increased in 1991. The minimum wage would have sunk to a 40-year low in purchasing power by next January had Congress left it unchanged.
But there is another side to this story, and it's told by the people who have to pay the higher wages. They're not happy about it.
Over the past five years, Bill Mertens has built a small retail business called Enjoy Sports from the ground up in Roundup, Mont. He sells clothing, hardware and sporting goods, and has a small-engine repair shop in back.
Today Mertens employs 16 people and pays all of them more than the minimum wage - about $6 an hour on average, he says - but he swears he could never have built his business if the minimum wage had been $5.15 when he started. And even though all his workers now get more than the new target minimum, he says Congress' action will force him to raise his own wages to keep pace.
``I figure I'll have to give every employee a raise, which will cost me between $24,000 and $40,000 a year in increased wages and higher (payroll) taxes,'' Mertens said. ``Obviously I'm a little incensed about this. I don't know where the money's going to come from.''
He said he and his wife took home only about $11,000 jointly in each of the past two years.
As many as 14 million low-paid workers might get wage increases, thanks to the ripple effect Mertens described, the Labor Department estimates.
But as many as 400,000 workers might get fired by bosses trying to curb costs, counters the Small Business Survival Committee, an advocacy group that opposed raising the minimum wage. by CNB