If the disparity in labor costs is so great, it makes little difference whether the nominal wage here is $4.25/hour or $5.15. It is manifestly much less expensive to export the job than to have it done here at either minimum wage. Of course we have already done that on a large scale. This applies to industrial jobs, naturally, because you can build and operate a factory anywhere What about other jobs?

It's tempting to say that you can't export agricultural jobs, because the "factories" - the farms and the orchards and the vineyards are fixed here and must be tended here. Unfortunately, the moment we raise that argument, we are confronted by the fact that we can import the final product bodily from elsewhere, as witness Brazilian orange juice and Chilean fruit that compete with our own despite the cost of shipping. So there's no very strong argument there, even though we may feel in our bones that low-level agricultural. jobs can't be exported.

But when we consider straight "service" jobs, we see at once that we cannot export them unless we export the hotels and restaurants and hospitals and our big buildings too. For all of these employ some proportion of minimum-wage people who must perforce live nearby.

Let's remember that not all service jobs are filled by teenagers at fast-food restaurants. The overall number of older people in service jobs who are now paid at or below $4.25/hour must be significant; these all represent potential families who are living in poverty. How many are there, then? Here are some rounded-off figures drawn from the private sector.

There are 57 M (for million) hourly workers in the United States, producing goods. Of these, 40 M or 69% are in the service sector. Production people at or below the $4.25 level are 2.2%, totaling 0.435 M. Service people at the same level number 4 M (8.6%) Can we reasonably expect to export the jobs of these 4 million people who are currently condemned to live in poverty? We must either pay them enough to live on or supplement their meager incomes from public funds or private charities. Neither is a very palatable alternative.

Whether or not we will actually export the work of the 18 M industrial-production people may depend on transient conditions; we probably can't include them in the reckoning.

An interesting feature of the statistics is that while poverty affects all, the percentage of people enjoying the abysmal status of "poor but honest" is 6.5 for Blacks, 6.1 for Whites, and a leading 8.6 for Hispanics. This translates into 3.36 M basic Whites, and a total for Blacks and Hispanics of 1.1 M. So much for those who try to put the whole matter on a racial basis.

So we must think very carefully before we turn down the cries of the poverty-stricken for help.

Not charity; help.

Part of the thinking should include this question: what will happen if the minimum is raised to $5.15 - not a munificent wage at that? Why, strangely enough, the erstwhile desperately poor will now be merely poor, and will buy a little more products and services than they did when desperate. Doesn't business like more sales?

But what of welfare? Doesn't that keep the wolf from the sagging door? The high costs and abuses of welfare have led to a revulsion, perhaps a revolution, in our thinking. We don't want "those people" feeding at the public trough anymore. It's an uncharitable view but it's human and understandable.

We mentioned private charity, suggested by some of our reasonably comfortable legislators as the way to go. This alternative has been tried often enough in the recent history of the western world. Just think what it was like in the middle of the last century for those who lay at the bottom of the heap - the child labor, the abuse of women, the drunkenness resulting from futile efforts to forget one's troubles for a while, the filth and disease. When charity tried to cope, it met very limited success.

It's not for nothing that the expression "cold as charity" arose ...

On the other hand, the political arguments over this issue, whether or not to raise the minimum wage from $4.25/hour to $5.15/hour, an increase of 21%, has become pretty hot. Now there is talk of a trade-off, thus: allow the raise in return for removing the gasoline tax which has been touted as a frightful burden on the poorest in our society. It's 4.3 cents/gallon. If a needy family is forced to pay this tax, then supposing that they use 20 gallons/week, mostly in essential driving to work and for family needs, it comes to about 86 cents a week.

That's the huge burden imposed by the gasoline tax.

On the other hand, a raise of 90 cents/hour for a 40-hour week is $36.00! If the politicians accept the trade, the family will gain some $35.00/week. That ain't hay.

The employer, whose costs will go up by some fraction of 21%, depending on the labor content of his product or service, will no doubt pass the extra cost along to the customer, but it should rarely be the full 21% - if the sum is done honestly, which it may or may not be. And against that he can set his savings on gasoline, whether large or small.

It appears that one political party expects to save face by showing that it forced the repeal of the gasoline tax, while the other can do the same by showing that it by golly raised the minimum wage.

There's a whole stratum of society that will benefit because of these two happy faces.

Let's make the trade.

May 12, 1996 Hyman Rudoff All Rights Reserved

[email c/o jo campbell]

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