Teenage subminimum wage sparks debate
By STEPHEN KNIGHT
Of th« Emerald
University students who com
pete with teenagers for part
time jobs may have a problem if
Pres.-elect Ronald Reagan
keeps his campaign promise on
the minimum wage.
Reagan has said he hopes to
reduce unemployment in part by
lowering the minimum wage for
teenagers.
Teenage unemployment
hovers around 18 percent. For
black teenagers it’s about 3d
percent. According to propon
ents, a subminimum wage law
would give businesses an in
centive to employ jobless teen
agers who occupy the lowest
strata of the job market.
Sen. Orrin Hatch, R-Utah,
recently predicted that
when "the minimum wage goes
up to $3.35 an hour,
thousands—no hundreds of
thousands—of kids will lose
their jobs because businesses
just aren’t going to pay that
much for young people who are
only worth $2.50 an hour."
Hatch, the new chairer of the
Senate Labor Committee, and
others believe a subminimum
wage would give thousands of
idle teens a chance to join the
country’s work force.
But not everyone agrees.
Irv Fletcher of the Lane
County Labor Council claims
the subminimum wage proposal
is nothing more than “a subsidy
for big businesses.”
"Lower wages would just give
businesses an incentive to re
place older workers with
cheaper teenage labor,”
Fletcher says.
Fletcher says he doesn't see
why paying young people less
would create more jobs. In
theory, part of the cut in wages
is a price for training an un
skilled worker, but 99 percent of
teenagers' jobs require no skill
at all, he maintains.
“It takes a kid about 15 min
utes to learn his job at McDon
ald’s.”
Fletcher says McDonald’s,
which employs thousands of
teenagers, is the major ben
eficiary of such legislation,
along with businesses such as
janitorial services, restaurants,
motels and nursing homes.
But Karl Frederick, employee
benefits director of the As
sociation of Oregon Industry,
says it's "ridiculous” to assume
the proposal is a plot to put
money in the pockets of big
business.
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“Most industries are paying
way above the minimum wage
and have nothing to gain from a
lowering of wages for teen
agers” Frederick says.
Because of the minimum
wage many youths have been
squeezed out of the job market
by older workers, he claims,
citing a study done by Finis
Welch, a UCLA economics
professor and Rand corporation
consultant.
The study concluded min
imum wage laws have failed
since the 1930s. Welch says the
minimum wage freezes out
marginal employees and new
entrants.
Like Welch, Frederick ad
vocates abolishing the minimum
wage and replacing it with a
“learning wage.” Many Eu
ropean countries, Washington
and California have two-tiered
wage scales, he says.
Fletcher argues the subwage
laws in Washington and Califor
nia only apply to a low number
of small businesses.
Black teenagers who are
suffering the most from high
unemployment would benefit
the most from a “learning
wage,” Fletcher says. A sub
wage law would stimulate small
retailers and other businesses
to create jobs in the inner city,
he says.
“To believe McDonald's is
going to open three restaurants
in Harlem just because they can
pay a black kid less is bullshit,”
he says.
Black teenagers are the vic
tims of discrimination, not the
amount of the wage itself, he
adds.
How would teenage college
students be affected by a sub
minimum wage law?
Frederick says most wage
proposals deal with non-college
students.
“It’s the 14 to 16 year old
group that we are truly con
cerned about."
However, Oregon Student
Lobbyist Bob Watrus is con
cerned about the measure. The
federal subwage proposal
strongly resembles the Student
Learner Exemption Bill that he
and others fought for two years
to repeal, Watrus says.
The bill allowed employers to
hire college students for less
than the minimum wage. Watrus
says the OSL was successful in
getting state wages for college
students raised to federal levels
this year under the Higher
Education Amendment of 1980.
Watrus says he fears a sub
minimum wage law for
teenagers on a federal level
could nullify the Higher Educa
tion Amendment.
Meanwhile, Fletcher says he
has a wait-and-see attitude
about the possibility of college
students being affected by sub
wage legislation.
Another problem with the
possible legislation is whether
teenagers currently employed
would have their wages lowered
if the subwage proposal
becomes law.
I
Frederick says the legislation
would not be retroactive and
would apply only to new en
trants.
Fletcher says "big business"
interpreted Reagan's victory in
November as a mandate to roll
back labor’s gains over the last
three decades. And labor
probably will be on the defen
sive for at least four years
against anti-labor legislation
such as the subwage proposal
for teenagers, he predicts
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