Tie Minimum Wage To Automatic Indexing Plan

Posted: November 11, 1998

The big progressive issue of campaign 2000 was previewed in Washington state Nov. 3, but no one in the rest of the country noticed. By a 68 percent majority, voters approved an initiative that hikes the minimum wage to $6.50 an hour by 2000, and then - for the first time ever - indexes it to rise each year with the cost of living.

If ever there was an idea whose time has come, this is it. Inflation has eroded the minimum wage to the point where even 1996's two-step federal ``increase'' to $5.15 has left that wage with less purchasing power than it had in the late 1970s. In recent decades, the minimum also has sagged relative to the average wage, helping fuel the gap between the poor and the rest of us.

In Washington, D.C., these facts are routinely ignored. In Washington state, they finally ignited a progressive campaign. Churches, community groups, labor unions and thousands of volunteers came together to put Initiative 688 on the ballot.

Then a funny thing happened: The opposition didn't show up. ``I'm still amazed that the national restaurant lobbies and the NFIB (the National Federation of Independent Business) took a pass,'' the measure's campaign director, Tim Flynn, told me. But with times good, people were inclined to share the wealth. The movement's simple argument - if you do what society says, and go out and work hard all day, you shouldn't live in abject poverty - was hard to rebut. With the measure a big winner in polls from day one, business chose not to fight.

That reticence won't be repeated at the national level, where Ted Kennedy is already plotting another fight on the minimum wage. His last bill included indexing - before the White House urged him to drop the provision to broaden the bill's support.

It's not that the NFIB doesn't have a point. For one thing, minimum-wage hikes aren't targeted to those who need help. Why mandate a raise for teenage busboys from comfortable families when you really want to give hard-pressed breadwinners a lift? Such flaws make the earned income tax credit and other targeted wage subsidies better tools for poverty-fighting.

But a civilized society in which low earners have little bargaining power requires a decent wage floor. It doesn't kill tons of jobs, as foes claim. For all the GOP cries of doomsday during the last minimum-wage debate, for example, we've since pushed unemployment down to 4.6 percent. Even the boss-leaning Wall Street Journal reported that the hike had little impact on job creation, as new studies of low-wage labor markets had been predicting for several years.

Indeed, the best thing indexing would do for American politics is banish the absurd arguments both sides roll out each time around. If 6 bucks an hour sounds good, says the right, why not make it $10? Or $50? If a minimum wage is so awful, answers the left, why don't you just bring back slavery?

With indexing, such silly posturing could be banished. For businesspeople, modest and predictable hikes each year are better than not knowing when Congress will jerk your labor costs around on a whim. For liberals, an assured boost means less time fighting for basics and more time asking why our economy leaves so many full-time workers in poverty, even after the minimum is indexed.

In the end, it's partisan Democrats who will have to make the biggest sacrifice by embracing automatic indexing. As things now stand, with Congress needing to act, Democrats are guaranteed a politically potent brawl every few years that boosts turnout and reminds voters which side they're on.

This means that despite President Clinton's call for a minimum-wage boost as one of his post-election priorities, it's likely this issue ultimately will be saved for 2000 to lift Democratic election hopes.

Yes, there's something depressingly cynical about Dick Gephardt and Tom Daschle withholding a $1,500 raise from poor workers so they can milk it later for all it's worth. Still, I'm ready to give them one last great ride on the issue, if they'll kick the habit and give the rest of us an indexed minimum wage for the new millennium.

Matthew Miller is based at U.S. News & World Report. His e-mail address is mattino@ibm.net

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