The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight Prime Minister Peres of Israel [Newsmaker], Elizabeth Farnsworth has a Newsmaker interview; who owns AT&T [Focus - Whose Company Is It?], Paul Solman reports; raising the minimum wage, Margaret Warner runs a four-way debate [Focus - An Honest Wage?], and our Monday night essay [Essay - The Big Sleep], Roger Rosenblatt considers being asleep for seven years. It all follows our summary of the news this Monday. NEWS SUMMARY

MR. LEHRER: Israeli Prime Minister Peres today offered to help rebuild Lebanon. He made the offer in a speech in Washington, where he arrived yesterday for a three-day visit. Many public facilities and homes were damaged by Israeli air raids during the fight against Hezbollah guerrillas. A cease-fire last Friday ended more than two weeks of fighting across the Israeli-Lebanese border. Yesterday, Defense Secretary Perry signed an agreement with Peres. It commits the United States to upgrading Israel's missile defenses and especially to protecting Israel from Hezbollah's katyusha rocket attacks. In a NewsHour interview Peres said he was grateful for Perry's assistance.

SHIMON PERES, Prime Minister, Israel: We thought it will take two years to develop the powerful laser that can intercept the katyusha missiles, but he has suggested an interim solution that may take only six months. So maybe in six months' time we shall have not a perfect weapon but we shall have a sort of a weapon against the katyushas.

MR. LEHRER: We'll have the full interview right after this News Summary. Later this week, Palestinian leader Yasser Arafat will be in Washington for a series of events, including a visit with President Clinton at the White House. In Australia today, police captured the man who shot and killed at least 32 people on the Australia island of Tasmania. Another 18 were wounded. Two others burned to death in a fire the gunman set. No motive for the killings was released. The man barricaded himself inside a bed and breakfast with three hostages after his shooting spree at a nearby cafe. He set the building on fire following a 12-hour stand-off with police. One other person missing in the fire has not been found. Back in this country today, President Clinton announced a plan to reduce drug use among young people, and he asked Congress to approve $15.1 million necessary to implement it. He made his announcement at a Miami middle school that has been praised for keeping students away from drugs.

PRESIDENT CLINTON: Very briefly, this strategy has five very concrete goals: No. 1, to get young people to reject drugs, that's what you're doing here; No. 2, to use effective treatment and prevention to break this vicious cycle that link drugs to violent crime; third, to stop drugs at the border; fourth, to break up the sources of supply, whether they are cocaine farms in Colombia or methamphetamine labs in California; and finally, to reduce the terrible social and economic cost imposed by drugs in our society, $69 billion in the last year.

MR. LEHRER: How and Senate Republicans said the President's plan was long overdue. Senate Judiciary Committee Chairman Orrin Hatch said the President has been AWOL on drugs for the past three years. Former CIA Director William Colby is missing. He disappeared Saturday from his Maryland vacation home. Colby had planned a short canoe trip that day. Yesterday, a neighbor found Colby's capsized canoe in the river near his home. A county sheriff said officials assume the 76-year-old Colby met with a boating accident. The search continued all day for his body. In New Mexico, fire fighters continued to battle a blaze near the Los Alamos Nuclear Weapons laboratory. The fire started in the Hamez Mountains last Thursday. Fourteen thousand, five hundred acres have been destroyed. Officials at the Los Alamos Nuclear facility said today people living nearby are not in danger even if the fire does reach the laboratory. They say nuclear materials and explosives are safely stored. Two men arrested on suspicion of setting the blaze were arraigned today in federal court in Albuquerque. They were charged with leaving a camp fire still burning. In economic news today, the Commerce Department reported new home sales down 7.6 percent in March. It was the second straight monthly decline. And that's it for the News Summary tonight. Now it's on to the prime minister of Israel, who owns AT&T, the minimum wage, and a Roger Rosenblatt essay. NEWSMAKER

MR. LEHRER: We begin tonight with a Newsmaker interview with the prime minister of Israel, Shimon Peres. Elizabeth Farnsworth conducted it this morning at Blair House in Washington.

ELIZABETH FARNSWORTH: Mr. Prime Minister, thank you very much for being with us.

SHIMON PERES, Prime Minister, Israel: Thank you.

MS. FARNSWORTH: Will the cease-fire that was agreed last week stick, do you think?

PRIME MINISTER PERES: Yes. Not eternally. In the future, we shall have to come back to the real negotiations, namely the negotiations about a permanent solution about this.

MS. FARNSWORTH: The agreement seems quite similar to an agreement in 1993. What is different about this one? What did you get in this one that you didn't have before?

PRIME MINISTER PERES: Several things. The previous agreement wasn't a written one. It was done by telephones, and, you know, telephones have their own shortcomings. Everybody listens a different thing no matter what you are saying. When it's in print, it has a different value. Secondly, in the previous agreement, there wasn't an announced participation by the Syrians and the Lebanese. It was hinted but not declared. In this one, you have it. Thirdly, there are very clear definitions what is the cease-fire about, namely, neither side should shoot on the civilian life of the other side. And then again you have the right of self-defense if you are being attacked. And finally, I shall not mention all the points--it will be too long--there was established a mechanism, so if something is happening, you can call up the monitoring group and see how to stop it before it's becoming a real exchange of fire.

MS. FARNSWORTH: What's the significance, in your view, of Syria agreeing to a written document? This is something new, isn't it?

PRIME MINISTER PERES: Yes. Well, you should know the Syrians. It is extremely difficult to achieve with them an agreement, but in their favor may I say that once we reach an agreement, they respect it almost religiously.

MS. FARNSWORTH: And they have agreed to help control the Hezbollah, and that is new and significant, is it not?

PRIME MINISTER PERES: Yes.

MS. FARNSWORTH: Or agreed to help control?

PRIME MINISTER PERES: To help control the shooting of the Hezbollah, not necessarily the organization. They've learned quickly that the Hezbollah is actually causing a great deal of difficulties and troubles to the Lebanese people, and since in a way Syria sees herself responsible for the destinies of Lebanon, she realize the damage exceeds the advantage.

MS. FARNSWORTH: Has Iran agreed to anything through Syria?

PRIME MINISTER PERES: I would never seek an agreement with the Iranians because we cannot trust a word they say. You know, agreements are for honest people. These honest people don't have agreements; they have explanations.

MS. FARNSWORTH: Do you believe that the rocket attacks from Hezbollah on Northern Israel were aimed at changing the results of the elections, making, making sure that you don't win in the elections?

PRIME MINISTER PERES: 100 percent. It was an organized attack both in the southern part of our country, in the northern part of the country. In the South, the two other organizations, the Hamas and the Jihad, started to explode bombs in Israel for the very same purpose and in the North, they started to bomb the katyushas, and we know for sure that this is an organized and thought out strategy by the Iranians.

MS. FARNSWORTH: There's been a preliminary report on the shelling of the Kana base, the shelling that led to the death of nearly a hundred civilians, refugees, in Lebanon. Can you tell us about that report?

PRIME MINISTER PERES: Yes. You know, in order to intercept the launching of katyushas, we have sent forward some of our military units to really see where from they are shooting, and one of those units was severely attacked by mortars, shells, and in order to self-defend, they replied fire. They didn't have the slightest idea that in this bog, there are five or six hundred refugees. Would they know by order and by inclination, they would never do it. Now, we have warned the UNIFIL stations, the UNIFIL camps.

MS. FARNSWORTH: The United Nations camps.

PRIME MINISTER PERES: Yes.

MS. FARNSWORTH: In Lebanon.

PRIME MINISTER PERES: That the Hezbollah will use them, will use their vicinity for launching katyushas, but they are used and once they start to launch a katyusha, the people of the UNIFIL go take immediately shelter, so weren't worried about it. The spokesman for the UNIFIL has declared that they have witnessed that the Hezbollah started the attack. Now, let me say something as a minister of defense. If you send some of your boys deep in the country to defend your land against katyushas and if they're being attacked, attacked, you cannot tell them, don't reply. It's basic, so with all my regrets over whatever happened, and believe me, a mere child is a child, whether it is a Lebanese or Israeli, and the woman is a woman. We are not in the killing business. But we have to defend our land. We don't have an alternative to it.

MS. FARNSWORTH: Do you believe that the accord, the ends in this case justified the means, justified the, the Israeli actions in Lebanon?

PRIME MINISTER PERES: It wasn't our choice. We were forced to do so. We will do better without it, clearly. We didn't seek any shooting and any killing. What for? But this was a double attack, one against the peace process, another against our people. We have had to take actions in order to save the peace process and in order to guarantee the life of our people.

MS. FARNSWORTH: Now, back to the accord for a minute. The opposition Likud party has criticized the accord for leaving intact Hezbollah's ability to continue to be in Southern Lebanon and to have katyusha rockets in Southern Lebanon. How do you respond to the criticism of the accord?

PRIME MINISTER PERES: That's a nice thing about our opposition. Okay. The task of the opposition is to oppose. What else can they do? They have opposed the Oslo agreement, and they have opposed the agreement with the Palestinians. Now at a late hour, they came and say we support it, so it's a matter of timing, not in a too far away future. They will approve what we are doing right away.

MS. FARNSWORTH: Yesterday, you and Defense Sec. Perry signed an agreement about theater missile defense, and also about instant satellite warnings of missile attacks. The U.S. has agreed to give you, I understand, instant satellite warnings. Were you not getting those warnings before?

PRIME MINISTER PERES: We were not getting it in real time. In order to defend the land against missiles, you have to have the information right away. You cannot wait and the missile will come first and then the information will follow. Now, the problem with the missiles is that the missiles do not recognize borders. They do not stop any obstacles, at any fortresses. They cross everything that used to be called strategy. They are not impressed by time. They are not impressed by space. They are not impressed by sovereignty. So you have to have the size of the theater equal to the size of the danger.

MS. FARNSWORTH: How soon will this laser defense be operable?

PRIME MINISTER PERES: I must say that Bill Perry, the Secretary of Defense, was extremely generous and considerate. We thought it will take two years to develop the powerful laser that can intercept the katyusha missiles, but he has suggested an interim solution that may take only six months. So maybe in six months' time we shall have not a perfect weapon but we shall have a sort of a weapon against the katyushas.

MS. FARNSWORTH: Elections are just a month away. I think they're a month from today, aren't they?

PRIME MINISTER PERES: Right, yes.

MS. FARNSWORTH: The "Jerusalem Report" editor, Hersh Goodman, said speaking about the events of the last three weeks that the war in Lebanon was fought as much with an eye towards the elections on your part as with an eye towards the, the dangers from Hezbollah. How do you--how do you respond to that?

PRIME MINISTER PERES: I think this is a journalistic view I would rather give up and just have one campaign instead of two campaigns, I would like to have just the internal campaign between us and the opposition, rather to see the whole of the Middle East, has Tom Friedman has said, getting itself involved in our elections. What are all those anti-peace forces doing? They are trying to make their mark on the results of those elections. I don't take this judgment. I think it's unfounded.

MS. FARNSWORTH: And all through this or in the middle of this process, the Palestinian, the PLO voted to change its charter, to drop the parties that called for the destruction of Israel. How significant is this in your view?

PRIME MINISTER PERES: Very, very. You know, many Israelis felt that the Palestinians are a lost case. You cannot cross them. They will not fight terror. They will not change the covenant. As a matter of fact, they are now fighting terror. They did change the covenant, and this is the first time in the last hundred years and the Palestinians made two steps in a new direction, in a direction of dialogue and negotiations, instead of the direction of terror and violence.

MS. FARNSWORTH: What happens next? What is the next stage in the negotiations?

PRIME MINISTER PERES: The negotiations? We have several things to do. No. 1, the most important date is May 5th. May 5th we have to start the third stage of negotiations, namely to negotiate the permanent solution between them and us. We are going to respect the date, again, in spite of the fact that we are having elections. Second is we have promised to release some of their prisoners, particularly women prisoners, and we shall do our very best to keep the promise. Then there is one city where the redeployment didn't yet take place because of terror, Hebron. On that too we shall have to sit together and decide on ways and dates how to handle this rebelling.

MS. FARNSWORTH: You've said that you would like to see by the end of the 20th century four years from now full peace in the Middle East. What is the greatest obstacle, in your view, right now to that peace?

PRIME MINISTER PERES: The negotiations with the Syrians to find the right method and the right way how to really arrive with them to meaningful agreement, you know, the Syrian says we would like to have peace in the year 1996. I told them about a French author who was himself a pilot that used to say that mothers whose children are pilots are praying all the time that they will fly low and slow; they don't understand that to fly high and fast is a much better choice. So he said to the President with the Secretary of State, tell us, you want to fly low and slow, high and fast? We are ready to the two orbits. To fly high and fast, we have to elevate the level of the negotiations. You cannot negotiate by proxy. The leaders must meet, because, you know, the art of negotiation is not to make a choice, but to introduce an idea. It's a process of invention, of creativeness because all the known solutions are dead solutions.

MS. FARNSWORTH: Are dead solutions?

PRIME MINISTER PERES: Yes, because they are known and they have gathered an opposition and they have assembled skepticism.

MS. FARNSWORTH: Does it seem to you that the accord that you reached last week is a kind of a platform from which you can move to a final accord with Syria?

PRIME MINISTER PERES: I would say, yes. It's a first step, not the largest, but it is a step forward.

MS. FARNSWORTH: Well, thank you very much for being with us, Mr. Prime Minister.

PRIME MINISTER PERES: Thank you.

MR. LEHRER: Still ahead on the NewsHour tonight, owning AT&T, the minimum wage, and a Roger Rosenblatt essay. FOCUS - WHOSE COMPANY IS IT? - AT&T

MR. LEHRER: Now, who owns the American Telephone & Telegraph Company otherwise known as AT&T? There is more than one answer. Our economics correspondent, Paul Solman, of WGBH-Boston reports.

PAUL SOLMAN: In March, we chronicled the downsizing of AT&T and specifically Travis McElyea's last day at work. After twenty-eight and a half years on the job, he epitomized for us the larger story or restructuring corporate America and the phone company's January 2nd announcement that it was eliminating 40,000 people. Just 18 months shy of retirement, Travis McElyea was one of them.

TRAVIS McELYEA, Former AT&T Employee: I am angry that the company does not treat this as a business failure.

MR. SOLMAN: Uh-huh, uh-huh. That they can somehow get away with that, you mean?

TRAVIS McELYEA: Yeah, and, you know, I'm angry that, that Wall Street rewards it. Downsizing is treated as a tough decision, perhaps even a macho decision, that managers make, instead of a business failure.

MR. SOLMAN: McElyea was angry at Wall Street because when AT&T restructured and then downsized, its stock went up by 15 percent. To McElyea, that rise benefited shareholders and CEO Robert Allen, whose pay is tied to the stock price, at the expense of employees like him, and it revived a complaint that's becoming common this political season, that America's supposedly great companies should show more consideration for the many people with a stake in them. The complaint is the stakeholder, such as employees, customers, the community the firm is based in, are often sacrificed to the shareholders and the expectations of the stock market. Labor Secretary Robert Reich.

ROBERT REICH, Secretary of Labor: [February 26] Does a company have obligations responsibilities beyond the bottom line? Does a company owe anything to its workers, its workers' families, the communities in which it does business. Managers who balk at executing the judgments of the market may fear with some reason that they will quickly face their own day of reckoning. And yet, I want to suggest to you that this restricted vision of stewardship may be ultimately disastrous for this country. And it may ultimately harm American business.

MR. SOLMAN: But tell that to corporate America's top managers, themselves, or this spring to the managers of AT&T, who held their obligatory annual meeting this year in Miami to report the firm's fortunes to its shareholders.

SPOKESMAN: Welcome to the 111th annual meeting of AT&T's share owners.

MR. SOLMAN: In their minds, AT&T's corporate stewards have just been doing their jobs in the fast-changing world of telecommunications. It costs a fortune to keep up with new technology, so there's a huge investment to be made to stay ahead of the competition.

RICK MILLER, Chief Financial Officer, AT&T: In order to attract that investment, we need to earn profits so that the investors are getting a return on their investment. If the businesses are not allowed to be profitable by configuring themselves to be more productive with in some cases it might be fewer people, in other cases, hopefully it will be more people.

MR. SOLMAN: And that's what this is all about?

RICK MILLER: Well--

MR. SOLMAN: The layoffs, the restructuring and so forth?

RICK MILLER: Well, I think it's an important part of that, but that helps us to be more efficient, to produce better returns on the investment which will attract capital to AT&T, which then allows us to employ more people.

MR. SOLMAN: Rick Miller is the chief financial officer of AT&T. The theory he subscribes to is that he works for the rightful owners of the firm--its shareholders. They, in turn, elect members of the board of directors here at the annual meeting to look out for shareholders' interests. Finance Professor Robert Glauber has served on various boards.

ROBERT GLAUBER, Harvard University: What I teach in class and what the law says is directors are supposed to act on behalf of the shareholders. Directors are really very straightforward and simple people. They can only make decisions that are in the interest of one group, and if they focus on that group, they'll do that well. If you ask them to focus on a whole bunch of different stakeholders, they're going to get it wrong.

MR. SOLMAN: In fact, Glauber argue, managing strictly for the shareholders addresses an age-old issue of corporate capitalism.

ROBERT GLAUBER: The problem was that you had corporations owned by a large number of shareholders, none of whom could reach out and control the senior management.

MR. SOLMAN: Managers weren't doing what?

ROBERT GLAUBERS: Managers were doing whatever they thought they wanted to do, building big empires, riding around in big limousines. The idea was directors are supposed to keep an eye on management, make it accountable to the shareholders.

MR. SOLMAN: In the 1980's, this idea was seen as a reform. Boards of directors like this one at AT&T finally forcing top management to perform for shareholders, instead of for itself, and one way of doing it was by tying compensation to stock performance. But the reform has led to a new controversy. CEO's like AT&T's Allen now benefit directly when the bottom line is improved by letting employees go. And at the annual meeting, Allen's compensation, some five to sixteen or more dollars, depending on how you value his stock options, was the hot topic.

ED FEIGAN, Teamster Pension Fund: Yes. My name is Ed Feigan. I'm representing the Teamster Pension Fund. And, Mr. Chairman, I rise to object to the election of each of these board members. Simply put, each of these board members has failed in their basic task of deciding your pay.

IRVING LUTZ, AT&T Stockholder: I'm wondering about your confiscation of $20 million a year in salary and stuff.

EVELYN DAVIS, AT&T Stockholder: The timing about the bonus from you, how come it came right on top of the fact when 40,000 people were laid off? [applause] Why didn't they wait till things were cooled down at least? [applause]

MR. SOLMAN: CEO Allen responded by defending himself, his board, and their restructuring of AT&T.

ROBERT ALLEN, Chairman & CEO, AT&T: If you, as share owners, don't benefit, I don't benefit, and when we get to the other issue that's had a good deal of mis-reporting, and I'd like to clarify it, it goes to the options that were awarded to me and other senior officers by the board late last fall. They were options that today have no value, absolutely none. They are not worth the paper that they're written on. But they do have an incentive for all of us at the senior level to be sure that this restructuring, this transition is successful on behalf of AT&T's share owners and its employers. And the way they do this, if the stock price goes up, you benefit, the stock prices goes up, I benefit.

MR. SOLMAN: To understand what led to all this, you have to go back a few months to the much-publicized downsizing and the trivestiture that occasioned it. The trivestiture was a radical move. AT&T would split itself into three separate companies: the new AT&T, which will supply phone and other communication services, Lucent, which will manufacture communications equipment, and NCR, the computer company. The trivestiture announcement boosted AT&T's stock 10 percent and led to the downsizing announcement which drove the stock still higher and which Allen still defends.

ROBERT ALLEN: Putting off the inevitable, given the dramatic changes in our industry, would only lead to weakness and more draconian steps later. So I am convinced that some downsizing was necessary to protect the jobs of the 270,000 people who will make up the three new companies. That didn't make the decision any less painful for me personally.

MR. SOLMAN: At an AT&T job center in Boston, we assembled a group of former employees. They think that a system of pitting shareholders against them, the stakeholders, is simply short- sighted.

CHUCK MITCHELL, Former AT&T Employee: If all of your employees could walk out tomorrow, what's the value of the corporation? What do the shareholders have? Nothing.

TONY SCARSCIOTTI, Former AT&T Employee: I think what happens today is the shareholders are dictating to the company what they want, and they want more money, and they want it now. They want it fast.

MR. SOLMAN: To its critics then, AT&T has been playing to the short-term thinking of Wall Street, and the company's recent downward revision of the originally 40,000 downsizing figure has fueled their suspicions. Even Rick Miller thinks the company may have gone too far in its efforts to show shareholders it meant business.

RICK MILLER: If we, if we knew the way it was going to come out, we would have fought a lot harder about the way that we, we made the announcement.

MR. SOLMAN: You could have maybe gotten away with announcing, announcing less.

RICK MILLER: Last week, I met with a group of my peers, CFO's from other large companies, and one person in the room asked the other CFO's if any of them were going to undertake a major layoff or a major restructuring charge this year, and, umm, everyone in the room said, no way, that, that even though they had things to do that were important to their company, that they were going to do it in ways that were small and disguised, as opposed to making the grand announcement.

MR. SOLMAN: For their take on the shareholders' stakeholder debate, we turned to the former AT&T employees. Who do they think the firm should be run for?

KIM BERTRAND, Former AT&T Employee: I think if you run a company for its stakeholders, the community, the people, the employees, that out of that grows the reward to your shareholders.

TONY SCARSCIOTTI: I'm a stakeholder. I'm here doing the best job I can to make sure that the shareholders are getting what they need.

MR. SOLMAN: Not surprisingly, this is a group of former AT&Ters. A trio of new recruits had a different response.

UNIDENTIFIED MALE EMPLOYEE: I think the shareholders. I mean, they're the owners. It's their money.

UNIDENTIFIED FEMALE EMPLOYEE: Shareholders, yes, because we have to turn a profit, we have to keep them happy.

SECOND UNIDENTIFIED MALE EMPLOYEE: I believe I would have to go with the shareholders.

MR. SOLMAN: But perhaps the ambivalence isn't just a matter of having a current job at AT&T. More than 10 percent of the company's stock is owned by its employees, both past and present. They are stakeholders in one sense, shareholders in another.

BOB MORSE, Former AT&T Employee: I'm an AT&T shareholder also, but I got nervous awhile ago and thought it peaked around, uh, in the 60's, so I, I sold half of mine.

MR. SOLMAN: So you're a short-term shareholder too?

BOB MORSE: You bet. I was a shareholder 20 years ago. Okay. But I would have said that if you have a sustained growth above a certain part of your business plan, 7 or 8 percent, that's fine. Now, it's getting to be 12, 15, 20 percent, and, and the five-year business plans we used to do just nobody does anymore. We're lucky to do an annual one.

MR. SOLMAN: But the reason you no longer have five-year plans is because shareholders like you are dumping the stock if it's not doing well, is that right?

BOB MORSE: That's, yeah, that's exactly right. You've kind of got us all.

MR. SOLMAN: I caught them all. Well, that may not actually be so surprising because I'm one of them. My family investing strategy crafted right here in this office is about as passive as you can get, but through stock pension purchases at work, my wife wound up with a few hundred shares of AT&T. So we're AT&T shareholders, as surely are some of you. In fact, a great many Americans own some stock, either directly or indirectly, through a pension plan say, and are thus shareholders, and almost all of us in one way or another are stakeholders. So, in a sense, the shareholder/stakeholder debate is not in the stars but in ourselves. And so long as we, the shareholders, demand rising returns, we, the stakeholders, will feel rising pressure. FOCUS - AN HONEST WAGE?

MR. LEHRER: The debate over raising the minimum wage is next tonight. Margaret Warner has that story.

MS. WARNER: Should the minimum wage be raised? That question has suddenly emerged as a major legislative and political issue in Washington. We'll debate the economic impact of such a move but first this backgrounder on the politics of the issue by Kwame Holman.

MR. HOLMAN: With little legislation to call their own during this Republican Congress, Democrats seemed to emerge from hibernation last week, staging daily media events in their push to increase the minimum wage. Temperatures in Washington were warming and Democrats had a spring in their step. Unlike the budget, the deficit, or the future costs of entitlement programs, increasing the minimum wage is a simple issue to explain and one Democrats find easy to endorse.

ROBERT REICH, Secretary of Labor: [April 25] The President's proposal will increase the minimum wage by 90 cents an hour, by $7.20 a day. $7.20 a day can mean the difference between buying fresh milk and powdered milk. And I have talked to families who are buying powdered milk because they can't afford fresh milk.

REP. RICHARD GEPHARDT, Minority Leader: People don't want more government handouts. They want to earn a living they can live on. Wages are the most important family value. How can you build a strong family with strong values if your hard work doesn't pay off to pay your bills?

MR. HOLMAN: Since 1974, there have been eight increases in the minimum wage, the last coming five years ago when it was raised to the current $4.25 an hour. According to Democrats, that's not enough to keep up with the cost of living.

VICE PRESIDENT GORE: Later this year, the minimum wage will fall to a 40-year low. It needs to be raised.

MR. HOLMAN: But Democrats have failed to convince the Republican leadership in Congress to schedule a vote on the minimum wage.

SEN. EDWARD KENNEDY, [D] Massachusetts: We have been denied the opportunity to bring that issue to a vote in the United States Senate, and Sen. Daschle and I and all of us are committed to raise the issue of the minimum wage every single day on every single piece of legislation.

MR. HOLMAN: For two weeks, Sen. Edward Kennedy succeeded in tying up an immigration reform bill before allowing action to proceed today.

SEN. TOM DASCHLE, Minority Leader: We will vote on immigration, we will vote for cloture this afternoon on the amendment. We will ensure that we get to the, the key issues relating to how we resolve the differences we have with regard to illegal immigration. We will vote on that and ultimately, we will have our vote on one of the most important moral and family issues of the day, minimum wage.

MR. HOLMAN: In the House, however, the rules make it much tougher for supporters of a higher minimum wage to schedule a vote, but those supporters do include about 20 moderate Republicans, enough, it appears, to win approval of a minimum wage increase.

REP. CHRISTOPHER SHAYS, [R] Connecticut: [This Week With David Brinkley] This ultimately is going to happen. Let's do it now, not--it's like we're being dragged to the altar kicking and screaming. We've got to deal with it now and put it behind us.

MR. HOLMAN: But most Republicans say raising the minimum wage would destroy hundreds of thousands of jobs and are looking for alternative ways of helping the lowest paid workers.

REP. TIM HUTCHINSON, [R] Arkansas: The earned income tax credit program embraced by Republicans and Democrats from Ronald Reagan to Bill Clinton, from Gingrich to Gephardt, should be refocused toward those minimum wage earners most in need, i.e., families with children, that single mom with two children who decides that, well, welfare is a better deal, a better choice than staying on the minimum wage job. That's where we need to increase the EITC.

REP. DICK ARMEY, Majority Leader: Tim has here an outstanding idea. We are doing what we intended to do with the Earned Income Tax Credit when it was first innovated, improve the well-being, the well-offness of low-income workers without destroying job opportunities, and keep the credit focused on those who truly need it.

MR. HOLMAN: House Majority Leader Dick Armey says there'll be no vote on increasing the minimum wage. Democrats vow to continue pressing for one. Without a vote, the minimum wage could become a key issue in the November election.

MS. WARNER: Now the substance of the minimum wage debate as seen by two economists and two business people. Barbara Bergmann is an economics professor at American University in Washington who specializes in labor economics. Finish Welch holds the same position at Texas A&M University in College Station, Texas. Eric Sklar is the owner of Burrito Brothers, a small restaurant chain in the Washington area which employs about 65 people, and Joni Paladino is the owner of Johns Garage and Parts, a repair and trucking service in Brockway, Pennsylvania. She has 11 employees. Barbara Bergmann, you support raising the minimum wage. Why?

BARBARA BERGMANN, American University: Well, I think the country can afford to pay people who work at hard, difficult jobs full time enough so that they can live decently. As things are now, you can't support--a single mother cannot even support one child in, in--on the minimum wage above the poverty line. So this change would do that. A lot has been, of course, predicted, that terrible things would happen, but, you know, back in the 70's, the minimum wage was the equivalent of $7 an hour in today's prices, and nothing very terrible happened.

MS. WARNER: And now, of course, it's $4.25.

PROF. BARBARA BERGMANN: That's right. And, you know, it's been allowed to just slip down as the rest of the country has, has had increases, and these people haven't really had any. So it really needs to be raised.

MS. WARNER: Prof. Welch, you have opposed raising the minimum wage. What is your argument?

FINISH WELCH, Texas A&M University: [College Station, Texas] Oh, excuse me, there are several arguments. One--the way that increasing the minimum wage is usually justified is in terms of a poverty program, i.e., to enhance the well-being of poor people. And as such, it's amazingly poorly targeted and simply perverse. Most of the people who work at or near the minimum wage are simply not poor. Many of them are secondary earners in families that have higher wage earners. Many are simply teenagers in middle class families. Uh, the increase in the minimum wage has a very uneven impact across areas of the country. You don't see many people working at $4.25 an hour in the East Coast. You see a lot of them in the South and Southwest. It also has an uneven impact across industries. Any time you raise the minimum in the fashion like one we're describing there are winners and losers. On the job site, the losers are people who in any case would earn the least, because you're doing absolutely nothing to increase a worker's productivity. You're simply saying to someone who has incentive to do the best they can anyway and find the best job that they can that unless you can find a better job, you simply cannot work, unless you can find a job that we think is adequate for you, we're not going to allow you to work. Uh, some will, indeed, get increased wages and retain their jobs. Others simply won't. The losers are the least able.

MS. WARNER: Well, how many--let me interrupt you for a second and ask you this. How many jobs do you think will be lost if the minimum wage is raised 90 cents an hour over the next two years?

PROF. WELCH: Uh, the numbers are, are not incredibly high. What you're talking about is a 21 percent increase in the minimum, which would raise the average cost of employing teenagers, which is the group most concentrated in the minimum wage, by something under 5 percent, so you're not going to see massive job losses. This isn't a big program. It's not going to increase the income of poor people hugely. It's not going to increase the income of anyone hugely, except perhaps the minimum wage advocates.

MS. WARNER: All right. Well, let me get Professor Bergmann to respond to that. How do you respond to his criticisms?

PROF. BARBARA BERGMANN: Well, there are people who do support themselves on the minimum wage.

MS. WARNER: Do you have any idea how many people are sole breadwinners for their family on that?

PROF. BARBARA BERGMANN: No, I can't tell you that.

MS. WARNER: I think Bob Reich, Robert Reich, the Labor Secretary, who we just saw in the taped piece, says it's something like 40 percent of those who would be affected. Do you think that's correct?

PROF. BARBARA BERGMANN: Well, that's probably--you know, it's hard to make an estimate like that, but I'd like to respond to the job loss point that most of the opponents, as well as Dr. Welch, make. And that is that, uh, some recent studies have really thrown that assertion into doubt. A study led by a Princeton economist looked at a rise in the minimum wage that occurred in the state of New Jersey, and they went to the fast food places, and they said, how did this affect you, and what happened? They found out that they didn't decrease employment, and they didn'teven raise the prices, so I, I think that in some cases people may lose jobs but the general effect is not going to be very big. But, you know, even if there is a job loss, it is balanced by the fact that people who retain their jobs are going to do better.

MS. WARNER: And you said that under--if the minimum wage were raised, what, a single mother with a child could be at--then at the poverty level, is that right?

PROF. BARBARA BERGMANN: A little bit above the poverty level. As of now, she can't be.

MS. WARNER: Professor Welch, briefly, just respond to the points Professor Bergmann raised.

PROF. WELCH: Well, Professor Bergmann's right in the sense that the water has been muddied by a bevy of recent studies. And the principle one is, in fact, the New Jersey/Pennsylvania comparison that she described.

MS. WARNER: And you're saying there they raise the minimum wage on the New Jersey side but not in Pennsylvania?

PROF. WELCH: That's right. Back in 1992, they raised the minimum in New Jersey from $4.25 to $5.05. And there is a study out of Princeton University indicating that very little happened. There are two points worth making on that: One, many of us have followed that study. I am one. It's seriously flawed. I don't think professional economists take it seriously any longer. Secondly, it's an ad hoc example. There are many things that affect employment. The minimum wage is only one. And when you do these little subtle before and after comparisons here and there, it's not surprising if sometimes you find when something happens that you would have pointed to that would have led you to expect that employment would fall, you see it, in fact, increase, because there are other things going on. The point I'd like to make is that if a few ad hoc examples of seemingly contradictory changes in employment following a minimum wage increase can disprove the law of demand, then a few examples of old men and women who smoke can disprove the link between smoking and bad health. That's heart disease and cancer.

MS. WARNER: Let's get in two people now who are actually going to deal with this if it happens. Eric Sklar, are you in favor of raising the minimum wage?

ERIC SKLAR, Burrito Brothers: Yes, I am. It's a basic issue of fairness. The minimum wage, as Prof. Bergmann has said, is at a 40- year low in terms of real dollars, and minimum wage doesn't decrease employment. It guarantees people who are hard working members of our society but who don't have the skills to move up to higher-paying jobs, it ensures that they can support their families, and there's this idea out there, and I think it's pretty common, that minimum wage workers are teenagers or college students, but a lot of minimum wage workers are not. Over a third, as you said, are sole breadwinners in their family, and two-thirds are adults.

MS. WARNER: All right. What about those who work for you who receive the minimum wage or anywhere in this range between the minimum wage and to what it might be raised, are they sole breadwinners? Who are they? Why don't you raise their wages now if you think they should be raised?

MR. SKLAR: Well, there's two parts to your question. One is I would love to raise their wages myself, but as long as my competitors are paying lower than I am, I can't compete and pay my workers more. But my, my minimum wage workers range from high school students to sole breadwinners in their family. That's the reality, and my employee base represents very much the statistics that I said. And these are people who are working very hard. And we're talking about rewarding work in this society. We're spending a lot of time talking about reforming welfare. Well, if we're going to do that, shouldn't we reward people who are willing to work hard and make sure that their living is enough to support themselves and their family?

MS. WARNER: All right. Joni Paladino, what impact, what is your position on raising the minimum wage? What impact would it have on your business? JONI PALADINO, Johns Garage and Parts: [University Park, Pennsylvania] I'm against raising the minimum wage; umm, as far as my business is concerned, uh, we would lose an employee. We would choose not to hire what we call the clean-up boy position.

MS. WARNER: And why is that?

MS. PALADINO: Uh, we can't afford to pay someone who we consider a marginal employee that kind of a labor rate. Umm, it's, it focuses also on my mechanic, my truck drivers when they come into the shop to work, they're going to look at that raise, and they're going to expect the same raise, and none of this on merit. It is simply an artificial--an arbitrary raise that doesn't reflect my business conditions whether I am increasing customers or losing customers, providing more services, so I can gain more customers, it simply says you must pay these people, whether they're being productive for your business or not, more money.

MS. WARNER: So you're saying that if you had to raise this lowest-level job in your shop that then everybody else making what, six or seven dollars now, would also expect a raise?

MS. PALADINO: Correct. Umm, my mechanic would expect to keep the wage gap between himself and the clean-up position. We have a clean-up boy now who is not at the minimum wage. We hired him in November. He has proven himself to be responsible. He has gained more skills and proven his reliability. Umm, he has already gotten a raise. When he graduates, we will offer him a full-time position and another increase. Of course, he'll want someone to do the clean-up job, but that doesn't mean that'll happen if we have to hire someone who might not prove to us his productivity for six months or a year.

MS. WARNER: Prof. Bergmann, what about that point that Ms. Paladino just made, this idea of the ripple effect it could have?

PROF. BARBARA BERGMANN: Well, I think she's right. There is an effect of that sort. Not everybody's going to get a dollar for dollar increase. There will be some compression in the wage range, but that is true. But that's not so bad. That means that more people will gain. Now, as to getting rid of employees, uh, she's going to be knee-deep in whatever it is that this person cleans out. Now, you know, I think the most important thing is that if you have a business that's running well, that, that's satisfying its customers, it's not going to take a big drop in its employment. It's not going to fire people because it can't take care of its customers. If there's going to be any effect at all, I believe it will be in prices. And, uh, it's not so bad that people should pay a little more for the kinds of goods and services that these very low-level workers make.

MS. WARNER: Eric Sklar, how would you respond if the minimum wage were raised? Would you have to lay people off, or not hire, or would you raise your prices or what?

MR. SKLAR: In concert with my competitors, uh, I'll raise my prices a little bit. For example, an average customer spends about $5 on a meal in my store. I'll have to raise my prices about 6 or 7 cents over time to compensate the additional costs of the minimum wage going up. It's a minimal addition to costs. I don't think any of my customers are going to stop coming into my stores because of that additional cost, especially since my competitors will raise their prices as well. As far as the job side of it, I just don't see that happening. I opened my business in early 1989 and the minimum wage went up a few months later, and it just--it was negligible. It has a very small effect, because only a small number of workers in it--my work force and in the work force in general are minimum wage workers. In a multi-trillion dollar economy, it just don't amount to a huge difference economically.

MS. WARNER: Prof. Welch, how do you explain the difference in what we just heard from Ms. Palamino Paladino and Mr. Sklar in terms of how they would respond in this situation?

PROF. WELCH: Uh, well, I'd like to make two comments, one to Mr. Sklar. Competition must be hell in your industry. You're saying an increase in the minimum wage would drive up the cost of the product by a tad over 1 percent and yet, you'd lose business if, uh, if your competitors didn't have to also increase the wage. Ms. Paladino I think is, is right on. You're exactly on the mark. The crucial point that she made is that these are transitional jobs, that the act of working at the minimum in and of itself through the accumulation of job experience and learning by doing tends to raise productivity and, therefore, the wage. Your entry jobs are transitional. People do not spend a career working at the minimum wages. The few who do are the very rare exception. Uh, the other thing is it's perfectly clear that any time we raise the cost of anything people consume, without increasing their incomes or their budgets, belts tighten. And they have to make adjustments. In her case, she would make an adjustment as to a floor sweep. Presumably some of that stuff would be picked up by others. Things would be a little dirtier. That's the way it happens. That's the way we adjust our lives.

MS. WARNER: Ms. Paladino, how do you explain the difference in the way you think you'd have to respond and the way Eric Sklar would? Is it the difference in the nature of your business? What is it?

MS. PALADINO: Well, I think--excuse me--I think it is the nature of the business, and also the area from where we are. I'm in rural Northwestern Pennsylvania. It is definitely not the Washington, D.C., area. I, I can't explain how that kind of an impact is. I have competitors too. Um, some of them are self-employed. They don't have to deal with any kind of labor at all, and they still are out there, have their own little shops, and I just can't willy nilly raise my prices just because I have an increase in labor. And as I said, it's my other employees. It's a 7.65 percent I have to match in Social Security and Medicare. It's increased workers' compensation premiums which are based on payroll, and the biggest thing is the wage gap. I hired a mechanic a year ago. He's already gotten a dollar and a half raise so far after just one year. I-- like I said, this clean-up boy, he'll be getting another raise, and I've already had my raises, and they've been based on merit. These people have proven themselves to me. I won't be wanting to hire someone new to take that chance when someone who I have to teach perhaps basic work ethic, coming to work every day, being on time, completing a task or assignment that's, that's sweep all the floors, pick up all the tools, uh, sometimes the investment in some of these people is six months or a year and something I believe Prof. Berg Bergmann said, well, if some of these people lose theirjobs, or they can't get employed, well, that's all right because other people will be making more money. I mean, that's sort of leaving some of our society out, I think.

MS. WARNER: All right. Well, thank you very much. Thank you, all of you. We'll have to leave it there. ESSAY - THE BIG SLEEP

MR. LEHRER: Finally tonight, our Monday night essay as Roger Rosenblatt considers the man who slept for seven years.

ROGER ROSENBLATT: Last winter, a policemen in Chattanooga, Tennessee, awoke after having been in a state of sleep for seven years and began to speak. His family, his friends, and most of the country were properly shocked and delighted. Officer Dockery's family and friends, of course, had an obvious reason to celebrate. But why was this story such big and happy news for the rest of us? Seven years in a hospital in a sleep-like state after having been shot when responding to a 911 emergency call. Seven years removed from the world and yet within it. The doctors were careful to explain that Dockery had not been in a true coma so as not to give false hope to others, and Dockery, himself, may never recover. He fell into a silence after an operation and has spoken only sporadically since. But that first rush of joy everyone felt when he awoke and talked again at last, where did that come from? The sleep-like state in life has always enthralled writers and audiences. There is something of both life and death in sleep and something of sleep in death. Hamlet soliloquized about that sleep of death, suggesting that the two were akin, that one might even dream in death, or that life, itself, were a dream in which we sleep-walk. Rip Van Winkle slept through history, not unlike a lot of people. Sleeping Beauty was a fable of what? A beautiful girl put to death but not quite put to death. The thriller movie "Coma" depended on our fascination with the not quite dead, that cool scene of bodies hung from a ceiling by wires in what was literally suspended animation. In a sad and private realm, away from fiction, lies Sonny Von Bulow, still with the world and not. This condition of fathomless, incapable of being awakened sleep, has grasped people's imaginations precisely because it is death without death. So close are these states that Raymond Chandler could call his novel The Big Sleep and everyone would understand what he meant. One stares at patients lying in this condition and wonders where they are. We stare at people in comas and stare and stare again. Sorrow intermingles with the tantalizing suspicion that they hear, feel, think. If these sleep-like states simulate death, are the people living among the dead as we watch them? Are they as good as dead and merely await the final shutting down of all the circuits? But what if they occupied two worlds at once and there is a chance in the balance that they return to life? Ponder the imponderable. Should it happen that the sleepers away as Dockery awakened, not only would there be joy in welcoming them back because they are who they are, husband, father, friend, but because of the possibility that they crossed the river and returned, what reports do they bring? None, never, no matter. There is still that deep long journey they have undertaken. Has it been a wild adventure, or has it been as serene as it appeared? Sleep is sleep, after all. It is not death. Death is the end of sleep, and anything short of death breeds hope. We watch our fellow creatures in their mysterious, unreachable states, and we want them back with us. Good night is never as sweet as good morning, which is why we cheered for Dockery, who disappeared into a dream we wonder at and seek and do not seek. I'm Roger Rosenblatt. RECAP

MR. LEHRER: Again, the major stories of this Monday, Israeli Prime Minister Peres offered to help rebuild Lebanon. He made the offer in a Washington speech. Peres arrived here yesterday for a three-day visit, and President Clinton announced a plan to reduce drug use among young people. He asked Congress for $15.1 billion to implement it. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.