Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 29, 1990                   TAG: 9003290411
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: STATE 
SOURCE: The New York Times
DATELINE: EUFAULA, ALA.                                LENGTH: Long

MINIMUM-WAGE INCREASE A WASH FOR SOME WORKERS

Craft, 27, earns the federal minimum wage of $3.35 an hour and takes less than $100 a week home to the trailer where she lives with her two young daughters.

On April 1, Craft and about 3.2 million other workers at the bottom of the wage scale will see a big change in their earnings.

In November, Congress voted a 25 percent increase in the minimum wage, the first since 1981. Half the increase, to $3.80, takes effect next week and the second half, to $4.25, in April 1991.

But because these workers will see an increase in income, those who receive food stamps will lose some of their allotment. For example, Craft, who takes home $85.89 a week, will take home about $97 a week after Sunday.

She said her food stamps for the month of March were worth $200; food stamp officials, while declining to discuss individual cases, said the reduction in food stamps in a case like hers would probably be about $40 a month. The result: virtually a wash.

So there is not much rejoicing in Eufaula. Not from Craft, not from her colleagues at Reltoc, Pamela Akins and Geanette Tennille; not from Annie Ruth Scott, who works at the Hardee's fast-food restaurant here and has a son with diabetes but has no health insurance; and not from Christine Dennis, who has a temporary job at Southern Plastics Inc., a maker of soft plastic fishing lures.

All are single mothers with young children and representative of the two-thirds of the nation's minimum-wage workers who are women. Such families, even with a full-time wage earner, fall below the poverty line, which is what makes them eligible for food stamps.

"When a woman maintains a family and her earning potential is at or near the minimum wage, she generally cannot keep out of poverty," the Labor Department's Monthly Labor Review said last October in a study of 6.4 million whose family income was below the official poverty level in 1987 even though they worked or looked for work at least half the year.

"There's not much you can do with the minimum wage," said Akins, the mother of 4- and 6-year-old girls.

The immediate costs of the wage increase, of course, are borne by the employers - retailers, service establishments, a sprinkling of light manufacturing companies - and their customers.

Aides to the Senate Labor Committee said that during last year's debates on the minimum wage, Congress recognized that raising the wage would help some low-income people but not all, and would benefit many more people who are not poor.

The families who will end up with more money from the wage increase are those that already have a bit more than the Crafts or the Akinses. Youths who live with their parents and work will gain. So will members of two-worker families, who earn too much to qualify for public assistance.

The Bush administration and some leading Democrats are considering enhancing another device, the earned-income tax credit, which is meant for the working poor and in effect pays them a subsidy for working.

Under the credit, families with incomes up to $6,500 get a maximum benefit of about $910, usually as a tax refund or as a check if they owe no taxes, according to Robert J. Shapiro, an economist at the Progressive Policy Institute in Washington.

At incomes of $9,000 or so, the credit starts phasing out and stops at about $19,000.

Democrats and the White House support a higher benefit level. In addition, as part of child care legislation, the administration would extend the benefit to mothers who stay home with their children, while Democrats would use it as an incentive to encourage mothers to work.

In the South, particularly, the minimum wage increase has a wide effect - at least on paper. The Bureau of Labor Statistics says 1.5 million workers - 7.2 percent of the region's work force - receive no more than the minimum wage. The bureau defines the South as 16 states and the District of Columbia.

Eufaula is a tranquil city of 15,500 people and a per capita income of a little over $9,000 a year, putting it among the nation's poorest communities.

Its north end is a living museum of antebellum and Victorian mansions. Like many rural Southern communities, Eufaula is surrounded by forests, pastures and the shacks and mobile homes of the poor.

Eufaula has an unusually diversified, low-wage but also low-cost economy, with about 40 old and new industries. A sizable minority of workers are paid the minimum wage or a little more, among them some of the women at Reltoc, the maids at the motels, the help at the many fast-food shops, the beginner clerks at the K mart discount store.

Some of these people say they started their jobs four or five years ago at $3.35 an hour and have yet to see even a penny raise. Some say they hold two jobs.

At the Barbour County seat, 20 miles from here in Clayton, Ala., the supervisor of the food stamp program, Jean Teal, said 1,500 households, mostly in and around Eufaula, get food stamps. "Most people on the program work," she said.