WE PRIDE ourselves in this country on having a civilized labor market. Two bulwarks of that are the minimum wage and unemployment insurance. But in recent years with surprisingly little debate both these historic protections have been allowed to erode.
Of the 6.8 million people unemployed in October, a new study says, only a fourth received unemployment compensation. The 25.4 percent is the lowest figure in the program's history. One explanation is that more unemployment is chronic and long-term; less is of the shorter-term, cyclical variety for which the insurance program was designed. Recipients have therefore exhausted their basic benefits, even as a federal program paying extended benefits has been cut back. Many states have also tightened eligibility standards.
In urging that the government fight inflation before unemployment, conservative economists used to note comfortingly that the unemployed had the insurance program to fall back on. Some went so far as to argue that the program was so plump a cushion it helped perpetuate unemployment by reducing the incentive to find new work. Now the "normal" unemployment rate, meaning both the rate the economy can achieve without overheating and the rate the political system seems willing to accept, is higher than before. We are deep in a lengthy recovery, and the rate remains stuck at 6 percent, which once would have been thought alarming and now goes almost unheeded. The only proposal to help in Congress is to require the states to offer welfare to the unemployed. But half already do, and no one thinks that is more than a palliative. The unemployment insurance system is no longer adequate to the problem.
The minimum wage, not raised since the current level of $3.35 an hour took effect on Jan. 1, 1981, has also been allowed to fade. Had it kept up with inflation it would be about a dollar and a half higher. The head of a family of four could work full-time year-round at the minimum wage, and the family would still be several thousand dollars below the poverty line. Yet it is not clear even in the Democratic Congress that a move to raise the minimum will succeed. As with unemployment compensation, so similarly with this: conservatives say a higher minimum would be a disincentive to hire. Maybe it would in some cases; our sense is that many more people would gain than lose.
These basic protections -- the minimum wage, the unemployment insurance system -- served the country pretty well for a long time. They should not be abandoned out of apathy, nor without a clear idea of the alternatives and where the abandonment may lead. But that is what is happening no