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• man. But it's not an efficient $400 a week job. transfer because it is not well Focusing the debate on im- targeted at the low-income proving salaries for low-wage IS YOUR COMPANY ON families it was originally in- workers ignores other signals WELFARE? tended to help."For every dol- the economy is sending,Miller lar of the minimum-wage tax, says.The widening gap among only 20 cents is going to the high-and low-income people Ever wonder how much"corporate welfare"your company is right people," he says. Poor grows from the basic shift to collecting?It might be more than you think,at least if you're willing to tally corporate welfare the way some progressive people cannot live on the mini- an information, computer- groups do. mum wage—and they aren't. connected economy. Similar The term probably was coined by Secretary of tabor Robert Low-income families receive increases in the gap between Reich and applies to a variety of tax benefits and direct subsidies other government benefits. the rich and the poor have oc- given to business.But how much it is depends on who is Under the old welfare laws,a curred during other major counting.The Minnesota Alliance for Progressive Action(MAPA) single parent with two children economic shifts,he says."You estimates that business in Minnesota benefited to the tune of working full-time at a mini- want people to shift to this $1.5 billion in 1995. More than half of that—$942 million—stems from tax-policy mum-wage job was eligible for new technology," Miller says, decisions the state has made.For instance,the state does not enough additional income to "It is very clear the returns to collect sales tax on business services,such as engineering, take home the equivalent of a education have gone up.You public relations,and accounting.That decision accounts for$432 million of the corporate-welfare total.Another$241 million comes from the state's corporate-franchise rules,which tax multistate corporations based on a portion of the sales rather than on the percentage of payroll or property in Minnesota. REWARD LEARNING The corporate-welfare total ignores the political balancing that WITH EARNING goes on in determining tax breaks.For instance,MAPA counts the 2-cents-a-gallon reduction in the fuel tax on gasohol as a • Preston Miller sighs in disappointment about the increase in the corporate-welfare scheme when it was created largely to help federal minimum wage.But it's not the money that concerns him. farmers who grow the corn that goes into gasohol.That tax In Minnesota,the increase will have almost zero effect,he decision counts as$14.2 million in corporate welfare. says.Maybe restaurant prices will go up,because so many Another$163 million comes from the state's 1990 decision to minimum-wage workers wait tables.What really bothers Miller, lower the classification rate on commercial and industrial property from 5.06 percent to 4.6 percent,even though the economist for the Federal Reserve Bank in Minneapolis,is Minnesota still has one of the nation's highest property-tax rates that"there were not good arguments raised in opposition.It's for businesses. very important to draw the distinction between low-wage workers Tax breaks aside,corporate welfare includes the direct and low-income families,"he says.Most analyses show that a subsidies communities use to attract business,including tax- significant majority of minimum-wage workers are teenagers increment financing es use 7 million),industrial-revenue bonds from middle-class families,waiters and waitresses who also receive tips,or married workers who have a working spouse. ($228.4 million),and grants and loans from the state Department It's the unintended effects of a higher minimum that also of Trade and Economic Development($20.3 million). —M.L.S. concern him.Students might be encouraged to drop out to go to work for a higher minimum.Employers might be encouraged to move more quickly toward automation of certain jobs. "More importantly,it blurs the distinction that a difference in have the market itself sending have to start at an entry-level wage usually represents in terms of a difference in skills,"Miller very strong signals: get job. Now, you can't just kick says.This worries him particularly as the political discussion of wages shifts toward the livable-wage concept,which is the wage trained. need to get the in- people off a cliffinthey have at which a single parent could support a small family,or more formatioon n out that this is to have some continuing level than$10 an hour. where the reward is." of assistance to get them to- Miller has two grown sons--one is recently married,the other Ultimately. lawmakers will ward self-sufficiency. These engaged.All four of the young people are recent college need to decide what role busi- are real issues. But we are so graduates."Not one of the four makes the so-called livable ness needs to play in helping stuck on the rhetoric—the wage,"Miller says."But how are they living?Pretty well,I'd say. low-income families."it comes good old rhetoric—that we One of them has a brand-new car.They live in nice apartments. down to the question of what haven't reached a point where "It is not fair to allow wages and tax transfers to create an is a job,"Duncan says."All we we can define the issues and environment where someone with little education eams essentially what a recent college graduate does,"he continues. are saying is that if a person problem solve." ■ "The best way of earning a livable wage is to get a permanent works all day,every day,they job.Just stay there and learn the skills.You don't want people to should at least be able to keep Mary Lahr Schier profiled be satisfied with the minimum wage.You want them to study and their family going." Nazie Eftekhari, owner of the to train and to do more to get more,"he says. Says Cook, If you are a Araz Group, in the November —M.L.S. grownup and you've never issue of Twin Cities Business held a job before,you still Monthly. •