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President Proposes 90-Cent Increase In Minimum Wage But Republicans Show Little Interest, Saying Increase Will `Kill Jobs’

Sat., Feb. 4, 1995

Challenging skeptical Republicans with a popular pocketbook measure that he knows is unlikely to pass, President Clinton Friday proposed a 90-cent increase in the minimum wage, to $5.15 an hour, over two years.

“The only way to grow the middle class and shrink the underclass is to make work pay,” the president said in a Rose Garden ceremony at which he was joined by a number of congressional Democrats, many of whom had urged him to fight for a higher rate than the $5 figure he originally favored. “And in terms of real buying power, the minimum wage will be at a 40-year low next year if we do not raise it above $4.25 an hour.”

But, in a sign of the proposal’s dim prospects on Capitol Hill, not a single Republican attended the ceremony despite the White House’s efforts to attract some.

Speaker Newt Gingrich and Senate Majority Leader Bob Dole both promised to hold hearings and review the proposal, though Gingrich suggested that the leadoff witness on the House side might well be Rep. Dick Armey of Texas, the majority leader.

Armey, a former economics professor at North Texas State University in Denton, has vowed to fight an increase in the minimum wage with “every fiber” of his being.

Gingrich, R-Ga., expressed a similar view on the minimum wage. “I personally am very skeptical of it, and I think it will kill jobs, and particularly will kill jobs for minority teenagers,” he said. “But I think we owe it to the president to have hearings.”

Gingrich said he might prefer to create new “enterprise zones” in poor urban areas, Indian reservations and parts of Appalachia, in which employers who hired disadvantaged local workers would pay “zero capital gains” taxes.

In his state of the union message last week, Clinton said he favored raising the minimum wage but did not say by how much. His aides said later that he was leaning toward a 75-cent-an-hour increase but wanted to see if he could build congressional support for a compromise. By Friday, the only compromise he could reach was with Democrats who had wanted an increase of $1.50 or more.

While the White House expects it will lose the fight to increase the wage, it is one that presidential advisers say they are happy to make because they believe it puts Clinton on the winning side of public opinion on an issue that has had bipartisan support in Congress.

In 1989, President George Bush proposed the last increase, also 90 cents over two years, from $3.35, to a Democratic Congress, and it passed with the support of both Dole and Gingrich. Presidential advisers said Clinton had settled on the 90-cent figure in part to make the point that what was good policy for Bush then was good policy now.

But the Republicans control both houses of Congress now and have deep tax and spending cuts on their minds, so the White House cannot be assured that a wage increase will even be brought to the floor, where Republicans could face pressure from constituents to support it.

Rep. John A. Boehner of Ohio, the chairman of the House Republican conference, said he was concerned that an increase in the minimum wage could cost hundreds of thousands of jobs, the most common argument cited by opponents.

But several recent independent studies tend to show that such assumptions about job losses resulting from a wage increase may be overstated.

Tags: salary

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