Tuesday, April 23, 1996 | 11:59 a.m.
Rep. John Ensign, R-Nev., has reversed course and now supports an increase in the federal minimum wage.
His support is based on conditions outlined in a letter to House Speaker Newt Gingrich, R-Ga.
Ensign wrote to Gingrich that he will support a boost in the minimum wage if it is accompanied by a reduction in capital gains taxes. Capital gains include income earned from the sale of stock.
Ensign, who owns a veterinary hospital, also wants the increase tied to estate tax relief for small, family-owned businesses.
"I ran this by Newt and he was supportive," Ensign said. "I don't expect any trouble. I've talked to a lot of Democrats on (House) Ways and Means who support all these provisions."
Rep. Barbara Vucanovich, R-Nev., also would support a minimum wage increase tied to a reduction in capital gains taxes.
The Clinton administration and labor groups have exerted pressure on House Republicans, who have long opposed a minimum wage hike.
As recently as last week, national AFL-CIO television ads aired in 30 congressional districts, including Las Vegas, attacking Ensign and others who opposed an increase.
At that time, Ensign told the SUN the minimum wage should not be raised. He said working families would be better off if businesses received tax breaks, because businesses that pay less in taxes would increase employees' salaries.
The national minimum wage since 1991 has been $4.25 an hour, or $8,500 a year for a full-time worker. Republicans have opposed an increase, asserting that it would cost jobs, while Democrats have proposed raising the minimum to $5.15 over two years.
Last week, 20 House Republicans broke ranks and proposed a boost of $1 an hour over two years.
Detractors maintain that Republicans have reversed course because this is an election year, and the public supports an increase. A New York Times/CBS News poll last week reported that 84 percent of Americans "favor raising the minimum wage."
Ensign, targeted by Demo crats as the fourth-most-vulnerable House freshman, is running for re-election in a district that includes 30,000 more Democrats than Republicans and an estimated 90,000 AFL-CIO members.
Vucanovich, who is retiring in 1996 at the end of seven two-year terms, said Democrats are raising the minimum wage issue "for purely political reasons."
Democrats need 20 congressional seats in November to regain control of the House.
The issue is also expected to be contentious during the presidential election in the upper Midwest, a key battleground where blue-collar voters can sway elections.
"If Bill Clinton and the Democrats supported a minimum wage increase for economic instead of political reasons, they would have done it when they controlled the Congress and the White House in 1993 and 1994," Vucanovich said. "Instead, they waited to make political hay out of the issue in the 1996 election year."
Although there is no certainty Clinton will sign a bill that includes Republican demands, Ensign said a minimum wage increase seems inevitable. He said he supports the $1-an-hour increase Republicans have proposed.
However, Ensign reiterated his belief that a minimum wage increase without the business tax rebate could result in the loss of 700,000 jobs nationwide.
"Everything I have been shown is that it will cause unemployment," he said. "But it looks like this thing is going down the pike."
Labor leaders argue that "downsizing," in which thousands of workers are laid off to boost company stock earnings, is to blame for most job loss, not an increase in the minimum wage.
"Look at the stock market and CEO (chief executive officer) profits and then look at the minimum wage," said Claude "Blackie" Evans, executive secretary-treasurer of the Nevada AFL-CIO. "It's ridiculous."
The New York Times/CBS News poll noted that since the last minimum wage increase in 1991, 10 million new jobs have been created in the United States, compared with 495,000 lost in the first two years.
Ensign said fears about potential short-term job loss could be abated if the increase took effect after a new employee spends three months on the job. Vucanovich also said she supports a so-called "training wage."
"You need to get them (employees) to where they know about the work they're doing," Ensign said.
Sens. Harry Reid and Richard Bryan, both D-Nev., support increasing the minimum wage. Reid spokeswoman Susan McCue said Reid has supported a reduction in the capital gains tax but would prefer the minimum wage issue to be passed without conditions.
"If we have a clean bill, we could get to a vote sooner," McCue said.
Bryan has not determined whether he would agree to all the conditions proposed by Ensign.
"He'll want to take a look at the proposals they're offering," said Karen Kirchgasser, Bryan's spokeswoman.
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