Joann Peters, 18, is an attractive young woman, not overly endowed in the brains department, who was graduated a few weeks ago from her small-town high school. She has no great interest in college and no funds for tuition. She is living at home with her mother and a younger brother. Her mother earns $9,360 a year as an ironer in a local laundry.
James Kennon, 41, is manager of the Steamboat restaurant at 23rd and Main streets. His franchised fast-food operation is in heavy competition with the Sizzlin' Steak and the Happy Crab. Kennon works seven days a week, but his food costs are rising and his rent just went up. In slow weeks he has a tough time meeting his payroll.
The Steamboat now employs 10 persons per shift at the minimum wage of $3.35 an hour and two others at $4 an hour. This figures out to labor costs of $41.50 an hour or $332 for an eight-hour shift. He really could use an 11th worker to clear tables and wash dishes, but he hesitates to add to his payroll when his margin of profit is so small.
Very well. Joann Peters and James Kennon, meet Sen. Edward Kennedy. The gentleman from Massachusetts is about to complicate your lives. He and Rep. Augustus Hawkins (D-Calif.) are pushing hard for a bill to increase the minimum hourly wage in 1988 from $3.35 to $3.85. It would mandate a minimum of $4.65 in 1990.
Joann would like to work at the Steamboat. Jim Kennon would like to hire Joann. This would be her first job, and there's an opening on the floor. She's good-hearted but a little careless; she needs the experience of holding a job and showing up on time. All of us know such Joanns.
But this is how Jim Kennon looks at it: the Kennedy-Hawkins bill would require him to pay his 10 lowest-level employees $3.85 an hour, or $38.50 per hour. The two cooks would have to be raised to $4.50 an hour to preserve a reasonable differential. If he keeps everyone employed, he is now looking at labor costs of $380 a shift, two shifts a day, compared with his present $332 a shift. He is looking at added labor costs of $35,000 a year, with no increase in productivity or service.
Goodbye, Joann, and tough luck, kid. Instead of 10 full-time hired hands at $3.35, Kennon will hire eight persons full-time and one to work six hours a shift at the required $3.85. Assuming the raise of 50 cents an hour for the cooks, the Steamboat will now have labor costs of $341.50 per shift. The manager will be spending roughly $7,000 more a year for labor; he will have nothing to show for it, and Joann will be just kind of, you know, hanging around home.
The example is hypothetical, of course, but this is how the real world works. In the idealistic world of Kennedy and Hawkins, an increase in the statutory minimum wage is a great thing for the poor folks. Don't you believe it. Every study that has been made of the economic ''benefits'' of a higher minimum wage demonstrates that an increase harms the very class of unskilled workers it is intended to help.
Who are these workers on minimum wage? The Department of Labor says there are about 5 million of them, of whom 3 million are in the 16-to-24 age bracket. Nearly 40 percent are teen-agers. Two-thirds are women. Only about 1.7 million work full-time; the rest work part-time.
For the great majority, a minimum-wage job is their first job. It's the bottom rung for persons who lack higher education and sophisticated skills. Clearing tables at the Steamboat may not sound like much, but it marks the beginning of real-world responsibility. Here the willing Joanns have an opportunity to earn an honest wage, to acquire experience, and to demonstrate to the Jim Kennons that they have the ambition and the personality to move up.
Kennedy and Hawkins, with the very best intentions, suppose that a higher minimum wage will reduce welfare costs and lower the number of families at the so-called poverty level. No evidence supports this surmise. On the contrary, for every increase of 10 percent in the minimum wage, we may anticipate a loss of 80,000 to 240,000 jobs for teen-agers.
Grammarians define an ''oxymoron'' as a combination of contradictory words. The example usually given is ''cruel kindness.'' That says all that needs to be said of the Kennedy-Hawkins bill.