Reagan budget calls for minimum youth wage

Reagan budget calls for minimum youth wage

Reagan budget calls for minimum youth wage

President Reagan’s 1985 Labor Department budget proposal, which calls for the establishment of a summer youth minimum wage rate, received the strong support of the Agency’s Secretary, Raymond Donovan.

Accordingly to Donovan, the proposed $26.4 billion budget will give the Labor Department the resources necessary to “assure that every Federal dollar, whether discretionary or entitlement, is expended in the most responsible manner.’

Fiscal 1985 will also be a year “in which we implement many management and legislative improvements,’ including the establishment of a summer yough employment wage rate, Donovan said.

“In order to address the continuing problems of youth unemployment’ the Administration intends to again ask Congress to enact a summer youth employment opportunity wage of $2.50 per hour–75% of the current minimum wage rate, he added.

The lower minimum wage rate would be available between May 1 and Sept. 30 and would only apply to workers under 22 years old.

In supporting a separate youth wage rate, Donovan said that “private employers are discouraged by the current minimum wage requirements from hiring youth in the summer since they lack sufficient skills or experience to perform fully in the work force.’

Donovan also stressed that “restrictions in this proposal would ensure that jobs would not come at the expense of adults.’

The Administration estimated that if a summer youth wage rate is adopted by Congress, the Government could save $87 million on its Summer Youth Employment and Training Program in fiscal 1985.

Under proposed funding levels, the program would receive $725 million to support 718,000 workers during the summer of 1986.

While it is too early to predict whether Congress will adopt a youth wage rate this year, it is fair to say that the Administratration faces a tough battle. Last year Congress failed to act on a similar proposal, which drew a mixed reaction from the restaurant industry.

The President’s pending budget proposal also outlines the Administration’s intent to submit legislation to extend the Targeted Jobs Tax Credit program for one more year.

The program allows employers of individuals with particular disadvantages in the labor market to obtain tax credits for part of the wages paid to newly hired members of these groups.

Last year Sen. H. John Heinz (R-Pa.) sponsored legislation that calls for multiple-year extension of the credit–a plan supported by many food-service operators.

Another key provision of the President’s budget proposal would provide for the payment of $18.5 million in unemployment benefits in fiscal 1985.

The Administration estimates that unemployment benefits will be paid to an average of 2.8 million individuals a week in fiscal 1985.

At presstime the Hotel Employees and Restaurant Employees International Union was deciding whether to launch a nationwide campaign aimed at persuading state lawmakers to consider tips as part of earned income for purposes of calculating unemployment benefits.

Under the President’s budget proposal, funding for the Occupational Safety and Health Administration would increase by $3.6 million in fiscal 1985 to enable the Labor Department to complete the installation of an “Integrated Management Information System.’

“This system will allow OSHA offices to access information in a timely manner, eliminate errors in data transmission and provide an alternative to on-site monitoring of state program operations,’ Donovan said.

Donovan also noted that OSHA expects to maintain its current level of inspection activity in fiscal 1985 and continue to upgrade and expand its mechanism for targeting compliance activity.

In addition, President Reagan asked Congress to raise the funding level of the Labor Management Services Administration by $400,000 to further strengthen the enforcement of the Labor Management Reporting and Disclosure Act and the Employee Retirement Income Security Act.

Photo: President Reagan

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