Fight Over 'Training Wage' Is Nearing Denouement
Washington--The proposed "training wage"--a reduced federal minimum wage for teenagers and other new entrants into the labor market--has moved to the forefront of a major political battle between President Bush and the Democratic-controlled Congress.
Disagreements over creation of a "subminimum" wage for new, mostly young workers appeared late last week to endanger prospects for final approval of the first increase in the federal wage floor for all workers since 1981.
The Congress May 17 cleared legislation raising the basic minimum from $3.35 an hour to $4.55 over three years. The bill would also provide for a limited version of the training wage, allowing employers to pay first-time workers 85 percent of the minimum during their initial two months of employment.
That plan, however, fell far short of the proposal offered by Mr. Bush, who has called for an 80 percent subminimum for workers during their first six months at any job.
Saying he also opposes any increase in the main wage floor above $4.25, the President has repeatedly threatened to veto the bill.
The measure in its present form probably could not survive that move, since it passed in both the House and the Senate with less than the two-thirds majority needed to override a veto.
And any subsequent efforts to work out a White House-Capitol Hill compromise on the minimum wage will face a major obstacle in the training-wage issue, which has evoked strong feelings on both sides.
Job Loss Feared
Congressional Republicans and business groups argue that, without an effective subminimum-wage provision, hundreds of thousands of young people could lose their jobs as a result of an increase in the overall minimum wage. Of the 3.9 million minimum-wage workers, 36 percent are teenagers, according to the Bureau of Labor Statistics.
"It is the young people who will lose their jobs as a result of this [increase]--the very people we ought to get off the streets," warned Bob Dole of Kansas, the Republican leader in the Senate.
President Bush voiced a similar theme during a speech to the American Retail Federation this month.
"My difference with the majority in Congress is not about 30 cents an hour on the minimum-wage legislation," Mr. Bush said. "It's about hundreds of thousands of people, largely young people, largely unskilled people, who won't have a job to go to," if the minimum wage sought by the Congress becomes law.
The Congressional Budget Office has predicted that about 200,000 jobs would be eliminated as a result of the increase, although some business groups claim that the number could go as high as 650,000.
The issue is not the minimum wage but "a question of minimum skills," Mr. Bush said, arguing that that Americans need to be trained better for available jobs.
But Democrats, union leaders, and youth advocates argue that a subminimum plan as broad as that sought by the Administration would create an unfair "two-tiered" wage system for workers, while providing little effective training for the young.
"We think the training wage, as proposed by Mr. Bush in a broad and unlimited form, would be a disaster for young people in the job market," said Cliff Johnson, acting director of the family-support division at the Children's Defense Fund. "A large segment of youths would never escape subminimum-wage jobs."
Under the Bush proposal, it would be very hard for teenage workers to break out of the subminimum-wage cycle, he said.
For instance, a student who worked only during the summers could continually work for a subminimumwage, he noted, because of the six-month duration of the training-wage period, which could be repeated each time the student began a new job.
Teenagers working all year also would have to work for the subminimum wage for the first six months of each new job, regardless of past experience. Turnovers in the minimum-wage job market are frequent, Mr. Johnson and others critical of the training wage point out.
Youth advocates also dispute arguments that young people do not need wage protection as much as do adults, who may be their family's sole source of support. "The argument for the training wage totally ignores the role that young people's income plays in meeting basic needs such as shelter and clothing and in defraying ever-rising college costs," said Mr. Johnson.
Compromise or Illusion?
Although they continue to question the whole concept of a subminimum wage, Congressional Democrats say they were willing to offer a proposal in hopes of reaching an accord with Mr. Bush, and thus clear the way for a badly needed increase in the overall minimum wage.
George J. Mitchell of Maine, the Senate majority leader, said the subminimum proposal was adopted "at the President's insistence," despite concerns that it "sets a precedent that many of us believe to be gravely mistaken."
Youth-employment advocates say the restricted scope of the bill's subminimum-wage provisions makes it possible for them to support the measure.
"From a purist perspective, we would prefer to have no subminimum-wage provision," said Mr. Johnson. "But given the political realities, we are prepared to support the much more limited and focused provision that is in the bill."
Mr. Johnson said that because the bill would limit the amount of time an individual would be eligible for the subminimum wage to a total of 60 days, the likelihood that the training wage would be used to cycle workers in and out of low-wage positions would be reduced.
The bill also includes some reporting requirements and limits the number of subminimum-wage workers a business can hire to one-fourth of its staff.
Many Republicans, on the other hand, say the subminimum provisions in the bill are so limited as to be almost totally ineffective. Very few adult workers, and less than half of all teenagers, are seeking a first-time job, and so would be eligible for a reduced wage, they suggest.
"We are today considering a training wage which is meaningless," said Senator Orrin G. Hatch, Republican of Utah, during debate on the bill. "Its sole purpose is to create an illusion, an illusion that balance between the help and the harm has been struck, a false illusion that something has been done to save jobs."
Mr. Hatch said the subminimum-wage provisions in the bill would save only 12,000 of a projected4650,000 jobs lost as a result of the minimum-wage increase.
Training Role Questioned
Opponents of a broad subminimum wage also question whether it would do very much to provide young workers with worthwhile training.
"The training wage as proposed by President Bush is a complete misnomer," said Mr. Johnson. "There are no assurances that employers who would pay the subminimum wage would actually provide training, and there are no assurances that the lengths of the training period would bear any resemblance to the amount of training actually needed in those positions," he said.
The Administration's proposal does not mention that training would have to be provided to workers during their reduced-wage period.
The Congressional proposal mandates on-the-job training in technical and personal skills for at least 30 days. But backers said that the provision would be largely unenforceable, according to a Senate Democratic aide.
In testimony this year, Secretary of Labor Elizabeth H. Dole said the training-wage period would be a time for a new employee to learn not only the skills specific to the job, but also "the basics about showing up on time, taking no more than 10 minutes if there is a 10-minute break, showing good faith with co-workers, and a good face with customers."
But Senator Edward M. Kennedy, Democrat of Massachusetts, questioned whether such training was worth the sacrifice. "Six months of subminimum subpoverty to learn lessons like that?" he asked.
"The Department of Labor's own calculations reveal that minimum-wage jobs rarely require more than 30 days' training," said Frank R. Lautenberg, Democrat of New Jersey, during Senate debate. "The high turnover of these entry-level jobs is further evidence that very few days are required to bring new minimum-wage employees up to speed."