76-10-A1
- Main Page \ Reagan Radio Commentaries \ 1977
| << Previous Broadcast | Next Broadcast >> |
Minimum Wage[edit]
Transcript[edit]The other day, in answer to a question from an audience, I expressed my view that the minimum wage is a factor in unemployment. Criticizing the minimum wage can lead to arguments high in emotional content, but low on reason. It is pure demagoguery to charge that questioning the minimum wage means one wants to see workers reduced to a starvation level income. I think all of us would like to see everyone who works for a living rewarded with enough to have some of the luxuries that make life worth living. But the minimum wage is not going to bring that about, or even help bring it about. We have an overall unemployment rate of nearly eight percent. The smallest group of unemployed, fortunately, is made up of heads of households. The largest--teenagers. Teenage unemployment is about two and a half times the rate for all workers, or about 20%. For black teenagers double it. The rate is 40%. Now let's look at a little history. In 1954 the minimum wage was 75 cents and black teenage unemployment was 16.5%. By 1968 the minimum wage had risen to $1.60 an hour and unemployment of black teenagers had gone up to 25%. Remember, too, that in 1968 we had full employment because of the Vietnam war. Now the minimum is $2.30 and, as I said, unemployment among black teenagers is now 40%. Actually, that $2.30 should be considered as closer to $3.00 because of about 70 cents in additional fringe benefits. But the push is on to make the actual cash level $3.00 with, of course, a proportionate hike in those compulsory fringe benefits. Based on past performance that would further hike unemployment in general, teenage unemployment in particular and especially among young black Americans. I'm aware that there is little chance of persuading the present Congress to cancel the minimum wage, nor am I suggesting such a move, even though fact and figure indicate that it has eliminated a great many marginal jobs. But with all the evidence available why should even an irresponsible Congress be unwilling to try a two-tier system designed to meet the problem of the greatest group of unemployed? By two-tier, I mean continuation of the present minimum for the general working population, but a lower minimum for teenage and part-time workers, beyond the minor, temporary instances in which it can now be used. I know that labor leaders have complained that employers would substitute teenagers for adult workers, but I don't think we're even talking about the same kinds of jobs. Western European countries have tried the two-tiered system and find it works well, and does not in any way threaten the jobs of older and more experienced workers. We might find we had not only reduced our overall unemployment, but had achieved some beneficial side effects. We could concentrate on the most important unemployment problem - the family wage earner. Juvenile delinquency might be reduced if idle young people had something to do and honest earnings to spend. And, a lot of resources now being wasted on ineffectual social tinkering could be put to better use. This is Ronald Reagan. Thanks for listening. |
Details[edit]
| |||||||||||
Added Notes[edit] |
