I am responding to your request for my views on the proposal to increase the statutory minimum wage. I support legislation to accomplish this objective. However, I have reservations about an across-the-board application, particularly with respect to young people. When the present minimum is raised, I feel that it is desirable for Congress to amend the Fair Labor Standards Act (F.L.S.A.) to permit employers to offer jobs to youths at special entry wages below the statutory minimum. A number of considerations have led me to this conclusion. Young workers generally tend to have few job skills. "hus, a lower initial wage--at least during the first few months on a new job--would give them a better chance to compete in the labor market. If special job market provisions for young workers are not available, I think the persistant problem of youth unemployment will become even more serious. The scope of teenage joblessness has been widely recognized, and I have studied the trends in unemployment closely. In the first quarter of this year, the unemployment rate for workers 16-19 years was 14.7 per cent--nearly four times the rate for adults. The situation was particularly distressing among black youth: nearly one out of three black teenagers in the labor force was unable to find a job. Moreover, the jobless problem among young people both black and white has been deteriorating over the last decade. Prior to 1960, unemployment among young workers was roughly two to three times the adult rate; however, since the mid-1960's, jobless rates among teenagers have been four or five times greater than that of older workers. Black youth have always carried a disproportionate share of the unemployment burden, and it has become even heavier in the last decade. For example, the ratio of the black youth unemployment rate to that of their white counterparts rose from nearly 2 to 1 in 1963 to about 3 to 1 in 1972. Moreover, there is little prospect of relief in the immediate future: although the number of white teenagers entering the labor market in the 1970's will be substantially lower than during the 1960's, the black teenage population will continue its growth at the same rapid rate which prevailed in the 1960's. The result will be severe job-finding problems for minority group youth unless positive steps are taken. Several developments over the last decade have contributed to the youth unemployment problem including the substantial expansion of the youth population. However, in citing various reasons, I do not think one should overlook the possibility that past changes in F.L.S.A. may have had an adverse impact on job opportunities for young people. A number of studies by economists have shown that the progressive extension of minimum wage coverage to retail trade and service industries may have had an adverse impact on teenage employment. Teenage employment is heavily concentrated in retail trade and service establishments. For example, over three-fifths of all young workers held jobs there in 1972. These are areas in which average wages are typically below the average for the economy as a whole and where extension of F.L.S.A. coverage would have had a noticeable impact. Although it is difficult to measure the impact on teenage employment, it would seem that raising labor costs may have provided a disincentive for employers to hire teenagers. Young people searching for their first job typically have no vocational training or experience. They need extra training and more instruction than an older worker, and all of this is costly to employers. Raising the wages of these inexperienced workers may become too costly to the employer, and job opportunities for young workers may be adversely affected. Given this situation, the implication is clear: teenagers occupy jobs in industries where a further extension of coverage and an increase in the statutory minimum might further diminish employment opportunities for young people. To help forestall such a prospect, I urge the adoption of a special entry wage for young workers. The Administration proposal for a youth minimum wage would meet this need. The case for an entry wage rests mainly on the incentive it would give employers to help pave the way for young people to begin productive careers in the working world. However, at the same time safeguards would have to be built into a proposal of this nature because some employers would undoubtedly use a differential minimum wage to replace some of their higher-wage adult _employees with lower paid teenagers. To prevent abuse, both a limit on the number of workers paid less than the minimum wage as well as an explicit time period during which the entry rate could be paid are necessary, as suggested by the Administration. Some risk will still remain, but I personally think it should be accepted. The unemployment situation among teenagers has been deteriorating for years, and there appears to be no prospect of significant improvement in the foreseeable future, unless some positive action is taken now. I believe an entry wage for young people would be a step in the right direction. Senator WILLIAMS. Before we conclude these hearings, I will take an opportunity to comment on what we have learned in these past 3 days. We have learned that a number of representatives of American business and this administration express a deep concern about inflation and unemployment; they express a deep concern about the plight of American teenagers, particularly black teenagers; they express an overriding interest in the marginal worker, particularly the black adult worker and they express their fears for the future of America's senior citizens. But let the record show as we consider this minimum wage bill that this same administration, with the support of many of these same trade association, continually vetoes our older Americans legislation, or day care center legislation, our Job Corps appropriations, and fought us all the way on equal employment opportunity. The Wholesale Price Index is increasing at a 25-percent-annual rate. The Consumer Price Index is increasing at a 9.2-percent-annual rate. Interest rates are increasing almost every week. None of these, apparently, are viewed by the President or his ivory tower economic theorists, as disruptive of the national economic stabilization program. But just dare talk about increasing the national wage bill by less than one-half of 1 percent next year and only 1.2 percent over the next 4 years in order to give 5 million working Americans a barely decent hourly wage and all of the false prophecies of doom fall down upon us. Frankly, I give as much credence to their predictions today, as they deserved a year and a half ago when they told us how sound the dollar was. One other comment must be made. All of the witnesses in the past 2 days talked about the serious teenage unemployment problem. Well, we all know it is serious and we have tried to do something about it through Job Corps programs, not by undercutting the wages of America's breadwinners. In all of the hearings thus far we have not heard much about welfare. But I want to talk about one particular class of people on welfare we never hear about-the woman who works full time, all year round, and supports three or more children. There are more such women in America today receiving welfare supplements of over $100,000,000 than there are unemployed 16 and 17 year olds seeking full-time work. It is those women who are struggling so valiantly for a decent life for their children that I worry about. This morning we heard testimony from the American worker, by the American worker, you know our first witness at these hearings on Wednesday was a representative of the U.S. Chamber of Commerce and he told this committee how he not only represented American business but that he was speaking in behalf of America's working people. I know he'll excuse us for considering the testimony of Mr. George Meany somewhat more representative of the American workers' interest. We were honored to have you here today, Mr. Meany. I say that not just because of your position on fair labor standards legislative but because you have been in the forefront of every fight in the Halls of Congress to provide jobs for unorganized and organized workers, to provide training for the unemployed, to provide assistance to the working mother, to combat job discrimination, and to assure an opportunity for decency in the wanning years of the lives of our older Americans. All of your years of struggling with those problems insures that your position on minimum wage legislation takes into account the plight of those Americans more than anything we heard so far. These hearings are concluded and at this time I will include in the record a number of statements that have been submitted. The record will remain open for a short time for additional statements. At this point I order printed all statements of those who could not attend and other pertinent material submitted for the record. (The material referred to follows:) 96-478 - 73 - 25 |