Playing Fair on a Wage Hike

In spring, the financial press fills with reports on the above-average pay of executives. An annual salary plus options and benefits of $20 million is now nothing special.

News like that, however, does put a negative light on Republican opposition to raising the minimum wage by $1 over two years to $6.15 an hour. Many in the GOP want the wage hike spread over three years.

In the House, enough Republicans joined with Democrats on March 9 to pass a two-year minimum-wage boost. But attached to it were tax breaks that would provide $8 in upper-income tax breaks for every $1 in gains for those on minimum wage.

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This week the issue goes before the Senate, where a bankruptcy bill and more-modest tax cuts have been attached to the minimum-wage bill. As in the House, the Republican leadership hopes to escape a presidential veto of legislation it seeks by attaching it to the minimum-wage bill. The tax cuts, they say, are meant to help small businesses deal with the minimum-wage hike. That is mostly nonsense, since the tax breaks have little to do with small business.

Moreover, Senate Republicans have tied themselves in a knot with the tax provisions. The Constitution says revenue measures must originate in the House. If the Senate bill is sent to a conference for sorting out differences with the House bill, some House members will object on constitutional grounds to the tax provisions. So now the Senate leadership is seeking to break up the bill into its components.

Economists have debated the merits of a minimum-wage increase for many years. Opponents say it raises unemployment. Proponents say it doesn't. Neither side has delivered a knock-out blow.

It's likely that the harm of this wage hike is minimal while the benefits for about 10 million workers are relatively huge. A full-time minimum-wage worker now earns $3,400 a year below the official poverty line for a family of three.

It's time to share the prosperity.

(c) Copyright 2000. The Christian Science Publishing Society

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