For four years, the Reagan administration has favored a subminimum wage for teen-agers to try to induce employers to hire more young people, and organized labor has denounced the idea, which Congress never has approved. Now, a new secretary of labor is promoting the youth wage of $2.50 an hour by acknowledging the legitimacy of labor's concerns.
In a partial turnaround for the Reagan administration, Labor Secretary William E. Brock said in an interview, "I have my reservations" about the subminimum wage, and said he would approve it only on a trial basis, although he said unemployed youth are owed that limited trial.
"Labor leaders have told me they are concerned it may become an effort to roll back the minimum wage and, secondly, they have fair questions about the effect this might have in displacing older workers," he said.
"These are concerns I share. We have no intention of rolling back the minimum wage. It's no good to institute government policy that would give some incentive to employers replacing one individual with another just because one happens to be young."
Despite his misgivings, Brock has said that failure to try the concept is unacceptable. "The trouble is, everyone digs in their heels while these kids cool their heels on the street corners of America," he said last Tuesday in a speech to the National Press Club.
Organized labor still opposes the idea. But Brock's conciliatory attitude, plus growing support not only from business but from minority interest groups and from big-city mayors, including D.C. Mayor Marion Barry, have revived its prospects.
"It's going to be tough, but with Brock it's a new game and we hope we can get some bipartisan support and move labor to understand that this would be a good experiment," said Senate Labor and Human Resources Committee Chairman Orrin G. Hatch (R-Utah).
The subminimum wage, which President Reagan calls a "youth opportunity wage," long has been a flashpoint with the labor movement, a symbol of the Reagan administration's perceived antilabor bias. Again this year, the proposal to allow a $2.50-an-hour wage for 16- to 19-year-olds for the summer, as opposed to the $3.35-an-hour minimum wage, is languishing in Congress.
The Labor Department estimates that the subminimum wage proposal would create about 400,000 jobs, potentially easing pressure on big cities that otherwise would be filled with idle youth this summer.
Whether the subminimum wage is a boon or a bust has been a constant argument among economists. But with 41 percent of black teen-agers out of work, many groups and individuals are arguing that almost anything is worth a try.
Among those cooling their heels are Tina McGee and Tanya Patterson of Southeast Washington, both 16 and wanting a summer job. The idea of a subminimum wage, with its promise of creating more jobs as the weather turns hot and school turns out, holds shimmering attractions. "It sure beats doing nothing all summer," Patterson said.
But the subminimum wage holds no bright prospects for Jeff Robinson, 19, of Southeast. He has been out of school for a year and has not had a job since he held a summer job after high school.
"My girl's going to have a baby, man, I need real money," he said. "I want to support myself . . . not half a chance to, say, learn something for three months."
And a subminimum wage will do nothing for Robert Murray, 22, an unemployed mechanic. "It's good for some kids, maybe," he said, "but I got to take care of myself. Hey, a good pair of sneakers cost $35 to $40. Things are rough making minimum wage. What am I supposed to do with half of that?"
An unusual coalition has formed to support the subminimum wage, including the National Conference of Black Mayors Inc.; the National Association of Manufacturers; the National Association for Equal Opportunity in Education, which represents 114 historically black colleges; the Boys Clubs of America; the Fraternal Order of Police; The Wall Street Journal, and the National Association of Minority Contractors.
Andrew Brimmer, a black economist and former member of the Federal Reserve Board, has endorsed the idea. In a March address to the Joint Center for Political Studies, a black Washington think tank, Brimmer said that, because of the current minimum wage, "young people today are bearing an excessive share of the burden of unemployment."
Others have doubts.
"Our feeling is that there is no evidence it would create jobs . . . . The evidence points to the people who now hold minimum wage jobs, minorities and women, losing their jobs to teen-agers because of a subminimum wage," said Thomas Lamb, staff director of the House Education and Labor subcommittee on labor standards.
Prof. Bernard E. Anderson, a visiting fellow of public and international affairs at Princeton University, argued that the government has tried a version of the subminimum wage and seen it fail because of a lack of response from employers.
Anderson cited the Youth Incentive Entitlement Employment program supported by the Labor Department from 1978 to 1980, in which the government paid all wages and benefits for disadvantaged teens. The youths had to promise to return to school at the end of the summer.
According to Anderson, private employers, given the chance to hire teen-aged workers at an "absolute-zero wage base," hired only 21 percent of 76,000 youths in the program.
"If private sector employers are reluctant to hire youths at no cost, it is difficult to believe substantially more jobs will be created simply by reducing the minimum wage," Anderson said.
In a similar study by the Rockefeller Foundation, employers were paid 50 percent and 75 percent of the teen-ager's wages. When 50 percent of the employe's wages were paid, only 10 percent of the eligible employers participated in the program. When the percentage was raised to 75 percent, only 5 percent of the eligible employers participated.
"Something here suggests to me that minority youth are simply not acceptable to employers no matter what the wage rate," Anderson said. "There are too many minority youngsters with dreadfully low levels of academic skills, poor abilities of reading, writing and comprehension. The object . . . , then, should not be to get the lowest wage rate, but training and education to improve their productivity."
Sar Levitan, an economist who is director of the Center for Social Policy Studies at George Washington University, said that under the subminimum wage proposal, employers would have an incentive to hire 19-year-olds instead of 23-year-olds.
"Who would be hurt by that?" he asked. "Minorities and women seeking a foothold in the marketplace because of experience."
However, Brimmer, speaking to the Joint Center for Political Studies, argued that by lowering the minimum wage, employers could hire young people not productive enough to justify being paid the minimum wage.
"Many private businessmen find that many low-skilled employes contribute barely enough to cover wages and other costs of putting them on the payroll," Brimmer said. "This is especially true of teen-agers who are just beginning their work careers."
"A minimum wage above the level of youth productivity discourages the expansion of job opportunities for exactly those groups who need assistance," he added. "Black teen-agers are hit the hardest and they need the most help."
Brimmer's argument is supported by the National Conference of Black Mayors. Barry, president of the group, wrote senators last year that passage of a subminimum wage would "result in immediate relief for millions of young people seeking summer employment."
The Rev. Leon Sullivan, chairman of the board of Opportunities Industrialization Centers, which trains mostly minority youths, wrote to offer support for the president's bill, saying, "I see it as an experiment that deserves to be tried, a demonstration to test some of the options that might encourage more small- and medium-sized employers to hire more youth between the ages of 16 and 19."
The National Association of Manufacturers also supports the bill.
"It is truly unfortunate that some have labeled the administration's proposal a subminimum wage when in fact it is most definitely a youth opportunity wage," NAM President Alexander Trowbridge said.