Economist: Minimum wage increase wouldn't cost jobs

Thursday, May 4th 2000, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) -- A state economist said raising the federal minimum wage by a dollar would not raise unemployment, but officials at some Oklahoma businesses said the measure is simply not needed.

The U.S. House and Senate have both passed a proposal to increase the minimum wage from $5.15 to $6.15, but it is now stalled in a committee.

President Clinton has expressed his support for the bill, but Sen. Don Nickles said he is worried it cause business owners to cut jobs, boosting the unemployment rate.

The Oklahoma Republican cited a Congressional Budget Office report that warns an increase could cost between 100,000 and 500,000 jobs.

"By raising the minimum wage, politicians would yank the ladder up too high for some people to get on in the first place," he said.

Not to worry, said Dan Gorin, an economist with the Oklahoma Commerce Department.

He said the same case was made before the minimum wage climbed from $4.25 to $5.15 between 1996 and 1997. But he said the nation's unemployment rate stayed low.

Meanwhile, the nation's tight labor market has forced most employers to offer pay above the federal minimum. Some business owners said a minimum wage increase would have little effect in Oklahoma.

"I think you'd find few people who are paying minimum wage for seasonal employees right now," said Debbie Nauser, a vice president at Oklahoma City-based Premier Parks.

Nauser said even the company's low-end positions pay more than minimum wage.

The measure is unnecessary, said Bob Clift, executive director of the Oklahoma Hotel Association and the Oklahoma Restaurant Association.

"Our members are paying above minimum wage and don't need the government to tell them to do it," Clift said.

He said it makes no sense to set a single national standard when the cost of living varies so much throughout the country.

Express Personnel Services, the Oklahoma City-based temporary staffing company, recently conducted a survey of 40 businesses nationwide. It found that the minimum wages at the companies were 59 percent above the minimum wage.

But even those companies could be affected by an increase in the minimum wage, since workers just above it could pressure employers for better pay based on the new rate.

Val Schott, director of the Oklahoma Office of Rural Health, said an increase could threaten cash-strapped rural hospitals, claiming it is unlikely that Medicare and insurance reimbursements would cover the increase.

"I don't see how raising the minimum wage is going to improve the quality of services provided," Schott said.