Now, at a time in which low-skill, low-wage workers should be celebrating the nation’s strong economic growth, which has been steadily increasing real incomes, these workers have much to worry about. While most workers will not be affected because they earn more than the proposed minimum wage, those with the fewest skills could be hit hard.

Despite popular misconceptions, the minimum wage is no miracle cure for poverty. Indeed, if the minimum wage were so good, why not have a $50 or $100 per hour minimum wage? That way poverty could be outlawed. In reality, the minimum wage is a poverty preservation program. The minimum wage merely raises the cost of employing low-skilled workers above the value of their workplace skills. Accordingly, it bars businesses from hiring the people who would most benefit from steady work.

Instead, companies are forced to seek better-skilled workers in an effort to conserve cash and maintain the labor productivity that helps fuel their high growth. That is particularly true of rapidly-growing firms who comprise roughly 3 percent of all companies but create more than 70 percent of new jobs. Over the past four years, start-up firms have accounted for more than half of all new jobs. Yet, these are the companies who can least afford the higher expenses of additional government-imposed employment mandates. In the end, higher government-imposed costs could lead to fewer new businesses and fewer new jobs. The heaviest burden will fall on the low-skilled worker — primarily young and minority.

Despite the rhetoric, there is nothing charitable about depriving the nation’s most vulnerable workers of an opportunity to gain valuable work experience. And it is immoral to deprive those seeking to make the difficult transition from welfare to work of a chance to improve their well-being. But neither morality nor economic realities have stopped the President from seeking to raise the minimum wage.

A few Congressional leaders have even introduced legislation that would raise the minimum wage more than 70 percent to $7.25 per hour by September 1, 2002. Others have proposed raising the minimum wage to $6.65 by September 1, 2000 and then indexing it for inflation. In effect, some in Congress advocate legislating inflation which always causes economic harm for all persons, particularly retirees with fixed incomes and the unemployed, including victims of an increased minimum wage.

Entry-level jobs are a starting point, the first rung on the ladder of opportunity. They are not, nor were they ever meant to be, an end in themselves. Though they often pay minimum wage, entry-level jobs offer a valuable training ground — much more effective than any government work program. In no way are they “dead-end” jobs. Many who start with entry-level positions eventually go on to hold management positions or start their own businesses, and almost all graduate quickly from their low wages.

Washington’s policy makers should consider ways to give all of America’s workers something to look forward to. Rather than raising the minimum wage, they should consider doing away with the minimum wage and other wage floors. At the very least, they should resist the President’s ritual call for increasing the minimum wage and let the market’s workings gradually render it irrelevant.

For additional information, contact Naomi Lopez at (415) 989-0833.