Editorial

WAGE DEAL MUST INCLUDE SOMETHING FOR EMPLOYERS

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Led by liberals such as U.S. Sen. Edward Kennedy, D-Mass., Cogress seems likely to approve another increase in the minimum wage. Congressional Republicans seem resigned to the fact of passing an increase for the second time in four years. Congress approved legislation in 1996 providing for a 90-cent an hour increase phased in over two years and, at GOP insistence, attached a package of tax relief for small business.

This time Kennedy and his liberals, backed by the White House, are calling for a $1-an-hour boost to $6.15 an hour over two years. "Why wait till the ax falls? asks U.S. Rep. Cass Ballenger, R-North Carolina. "I'm practical enough to know it's going to happen in the House." Ballenger adds that any measure increasing the minimum wage will likely include tax breaks or changes in the labor law designed as sweeteners to business groups that oppose an increase.

Ballenger and other Republicans say a $1 increase may be possible, perhaps spread over three or four years. In addition, they have floated proposals for full deductibility for the self-employed for health insurance costs or a cut in the federal unemployment tax. The National Restaurant Association also favors an increase in the deductibility of business meals from the current 50 percent to 80 percent.

While House passage seems likely, the situation seems murkier in the Senate, where opponents can launch a filibuster. "I don't plan on letting it pass," said GOP Senate whip Don Nickles of Oklahoma. And business groups won't give up without a fight. The National Federation of Independent Business recently launched a grass-roots lobbying effort designed to sway 40 or 50 lawmakers.

Having elected politicians determine the price of labor isn't the way to go. In a free society, competitive labor markets should determine that price. Those markets are sufficiently competitive that most restaurants and other employers are paying above the minimum now. If passage is assured, we hope a good deal for employers can be part of the deal. After all, without employers there can be no employees.