Notes for the Thread:
Greenspan Warns About Minimum Wage
By DAVE SKIDMORE
.c The Associated Press
WASHINGTON (AP) -- Raising the minimum wage could deny some teen-agers their chance at entry-level jobs, Federal Reserve Chairman Alan Greenspan said Wednesday.
Responding to questions from House Banking Committee members while delivering the Fed's semiannual report to Congress, Greenspan said increasing the wage probably would push inflation higher. But he said his main concern was ''individuals who become unemployed because of the minimum wage.''
''Being unemployed when you're a teen-ager ... is very detrimental to ... learning by training and becoming a productive member of the work force,'' he said.
President Clinton, in his State of the Union address last month, proposed raising the wage by $1 to $6.15 by September 2000. House Speaker Dennis Hastert, R-Ill., said Sunday that Republicans were willing to work with Democrats to find a middle ground on the issue.
Greenspan said raising the wage wouldn't cause job losses immediately because, with unemployment at a 29-year low, demand for workers is huge.
''When the economy turns down at some point ... we're going to find ... that teen-age unemployment will be higher than it would otherwise have been,'' he said.
Rep. Bernard Sanders, I-Vermont, asked Greenspan why he didn't oppose multimillion-dollar salaries paid to corporate chief executives. Greenspan conceded that shareholders may be ''wasting their money'' on CEO salaries but said his position was consistent.
''I'm arguing that the government should not be involved ... in both cases,'' he said.
On other subjects, Greenspan said:
Recent layoffs at Levi Strauss & Co. reflected ''a very specific problem associated with the industry and with the company'' and were not a signal of a significant shift in the economy.
Farm exports have fallen dramatically, mostly because of a drop in demand in Japan and other parts of Asia, and, absent a revival of that demand, ''It's going to be difficult to work our way through this particular problem.''
Domestic steel producers have been hit hard by a surge in cheap imported steel but, ''prices are stabilizing, ... orders are coming back a bit now, and the real pressures are easing in the steel industry.''
AP-NY-02-24-99 1608EST |
