There arose in the Senate last week a great weeping, wailing, and gnashing of teeth, as liberal Democrats bemoaned the defeat of Edward Kennedy's bill to increase the minimum wage. The tears were mostly crocodile tears. The Democrats made out like bandits.
Kennedy's bill was lovely politics. It permitted the Democrats to paint themselves as defenders of the downtrodden, benefactors of the lowest income families, apostles of compassion - all of that.This left the Republicans to be depicted as hard-hearted malefactors of great wealth whose greatest pleasure in life is to grind the faces of the poor.
The Democrats will be drawing political advantage from skewed economics. With a bare handful of exceptions, every student of elementary economics accepted this self-evident proposition: Kennedy's bill would have hurt the very class it pretended to help. It would have hit hardest at black teen-aged dropouts by spinning them off the wheel of opportunity.
This was the proposal: The minimum wage, which has remained at $3.35 an hour since 1981, would rise to $3.75 next year, to $4.15 in 1990 and to $4.55 in 1991. On paper, as Kennedy argued, such increases are plainly deserved. Over the past seven years the purchasing power of the dollar has dropped significantly. If $3.35 was fair in 1981, then $4.55 should be fair in 1991.
But fair to whom? The Kennedy bill would have directly and immediately benefited an estimated 5 million persons who now are employed at $3.35 per hour.
Their gross annual income, before Social Security taxes, would go up from $6,968 to $7,800. The senator's calculations are largely hypothetical: Only an estimated 110,000 of the 5 million actually work 40 hours a week the year round.
Indirectly and prospectively the Kennedy bill would have benefited other millions who work by the hour. To increase wage rates at the bottom is to increase wage rates on up the line. This is the bump-bump-bump effect.
The result is to increase an employer's cost of doing business without increasing the value of his product. Thus the cost of goods goes up, and inflation erodes the value of the higher wages.
This is the least of the objections to Kennedy's bill. The senator is filled with good cheer for the $3.35 worker who would hold onto his job at $3.75. He has little to say about the $3.35 worker who gets fired. He ignores the inexperienced and barely competent person who will not be hired at all.
The worst of the impact would fall upon an unknowable number of persons, mostly teen-agers living with their families, who are looking for their first job.
If such a teen-ager is barely employable at $3.35, he is not likely to be more employable at $3.75. His opportunity to learn the disciplines of the marketplace vanishes. What is "decent" or "compassionate" about that prospect?
Various studies have been made of the 5 million persons who at any given time are working at the minimum wage. The data should be treated as roughly, but not precisely, accurate.
Generally speaking, two-thirds of these wage-earners are working only part-time for part of a year. They are not from poor families; 70 percent of them are members of families well above the poverty line. They are not likely to be sole earners and heads of families. Two-thirds of them are under 25 years of age.
The typical minimum wage worker, says economist Robert J. Samuelson, "is a teen-ager from a non-poor family working as a waiter or waitress." They are just starting their climb up the ladder.
The metaphor is apt. Some workers never will make it past a fourth or fifth rung. Those who are blessed with education, ambition and luck will climb higher. A fortunate few will make it to the top. But nobody gets up the ladder without getting past the first rung - and that is the rung Kennedy wants to saw off.