(FORTUNE Magazine) – A specter is haunting America. An underclass of unemployable young people, particularly minority youth, is expanding steadily, abetted by drug abuse, adolescent pregnancy, and illiteracy. This may be the single greatest threat to the competitiveness of American business. These teens need jobs, and before that, job skills. A higher minimum wage, as proposed in the well-intentioned Kennedy-Hawkins bill now before Congress, would not help them much. And it could even hurt. The bill's laudable objective is to reduce poverty by bringing low-paid workers a higher standard of living. Unfortunately, the problem and the solution will pass like ships in the night. Virtually every economist who has ! studied the issue agrees that a minimum wage increase would lead to a loss of jobs. According to studies coordinated by the Minimum Wage Study Commission in 1981, each 10% increase reduces teenage employment by 0.5% to 1.5% -- a loss of up to 90,000 jobs in today's job market. The last federal minimum wage hike was a four-step, 46% increase, from $2.30 per hour in 1977 to $3.35 per hour in 1981, the current level. The Kennedy- Hawkins bill would increase the hourly wage another 39%, from $3.35 to $4.65, within 25 months. Thereafter, the minimum would automatically be raised to 50% of the average nonsupervisory private hourly wage. One economist estimates that the federal minimum wage linked to the Kennedy- Hawkins index could top $7 per hour in 1995. There would be an additional ripple effect as well. Employees earning more than the minimum wage would expect -- and probably get -- raises to maintain their historic differentials. In fact, such increases are built into some labor contracts. Proponents of raising the minimum wage argue that it is a national disgrace for a person to work 40 hours and earn only $134 weekly, $6,968 a year. This is a disgrace if the wage earner is attempting to support a family solely on this income. In this context, it is extremely important to understand the makeup of today's minimum-wage work force. More than a third are teenagers, and 59% are under 25. Many are students, some of whom are technically classified in government statistics as heads of households. Two-thirds are living with a relative who also has a job. Relatively few work 40 hours weekly, all year, for the minimum wage. A mandated raise for everyone is an inappropriate way to help the distinct minority whose sole livelihood is the minimum wage and public assistance. The most efficient solution would be targeted assistance for these people. The working poor can best be helped by raising the federal earned income tax credit -- the negative income tax that now tops out at $851. Another alternative to Kennedy-Hawkins deserves careful study: a training wage. The Administration has long advocated a lower minimum wage for teenagers. The training wage would be lower too, but it would apply to any new worker, regardless of age. After several months' training, the new worker's pay would be increased to a level that would reflect greater productivity. High turnover is one of the fast-food industry's big problems. The training wage would reward tenure and experience. / One big thing many young people need is what could be called general job skills -- including punctuality, teamwork, initiative, personal communication, and the ability to take direction and take responsibility for one's actions. The companies in Pillsbury's restaurant group teach those things -- what we call the invisible curriculum -- along with making hamburgers and delivering pizza. Our restaurants are in every kind of neighborhood across the nation, from affluent suburbs to impoverished ghettos. We are in direct contact with millions of young people and employ hundreds of thousands every year. We recognize that the welfare of American youth is critical to our own future. WE HAVE a long way to go before we will be satisfied with our job-training efforts. But we believe we can do the job more efficiently than government. If there are fewer jobs -- in our restaurants and across the rest of the economy -- the government will have to assume a larger and more expensive share of the burden for vocational training. Fast-food jobs are often disparagingly described as dead ends. We do not buy that. To us they can be a very large port of entry for disadvantaged young people into the mainstream of the American economy. Our young workers can take the job skills they learn with us into any kind of work. They can also stay with us and get promoted into good jobs in a dynamic business. A lot of our managers started in hourly paid jobs. Two regional vice presidents in our Burger King division rose from jobs behind the broiler without college degrees. We do not want to slash jobs or reduce our job-training role. But ours is a highly competitive business. If Kennedy-Hawkins passes, we would have little leeway to pass along higher wage costs in the form of higher prices. We are constantly looking for ways to increase productivity -- which often means serving more customers with fewer workers. Higher wages will only accelerate that activity. Poverty cannot be cured by higher paychecks for some citizens and unemployment for others. Employment should be the goal of federal policy, not raising the price of employees beyond their productivity level with resulting job loss.