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Business leaders react to Gov. Wolf push to raise minimum wage

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Pa. Gov. Tom Wolf introduces his proposal to hike the state's minimum wage to $15 per hour by 2025.
Pa. Gov. Tom Wolf introduces his proposal to hike the state's minimum wage to $15 per hour by 2025.

Gov. Tom Wolf has renewed his call for a $15 minimum wage in Pennsylvania and set a schedule to get there by 2025.

Ahead of his budget address next week, Wolf on Wednesday proposed raising the state's minimum wage from $7.25 per hour to $12 per hour in July, with hopes of boosting it to $15 per hour by 2025.

Pennsylvania last raised its minimum wage to the federal standard in 2009. Over the last decade, 29 other states have lifted the wage floor for workers, and many companies are offering starting pay well above the federal rate in a bid to attract workers in an era of low unemployment.

Wolf said the minimum wage hike would benefit about one million workers in Pennsylvania.

More broadly, Democrats believe a higher minimum wage would save the state hundreds of millions of dollars in public assistance benefits, including costs associated with food stamps, subsidized day care and housing assistance.

"Raising the minimum wage lets people afford the basics, like food, rent and transportation," Wolf said Wednesday. "It also lets people work their way off of public assistance rather than having taxpayers subsidizing employers that are paying poverty wages."

Michelle Griffin-Young, executive vice president of government and external affairs for the Greater Lehigh Valley Chamber of Commerce, said the chamber was the only one in the state to come out in favor of raising the minimum wage, but she is concerned that Wolf’s proposal is too much too soon.

“We would agree that it does need to be raised but not so drastically,” she said. “Our concern is if we jump from $7.25 to $12 an hour businesses will not be able to handle that big of a jump and people will lose jobs.”

She also said that Wolf’s proposal doesn’t take account of the state’s diverse economy, noting that a minimum wage that is fair in Philadelphia would not be in a place such as Butler County where the cost of living is lower.

Lehigh Valley Economic Development Corp. President and CEO Don Cunningham said the organization does not take a stand on issues such as the minimum wage.

He did say, however, that most people working even in non-skilled jobs in local industry are earning between $12 an hour and $15 an hour

He said for the roughly 30,000 people working in the Lehigh Valley’s logistics and warehousing industry, the market has already driven wages up past what Wolf is proposing.

Still, he said, not every economy is created the same, so he’s leaving the legislation to the legislators

Elsewhere, many Republicans and business groups oppose minimum-wage hikes, arguing that market forces can boost pay without government intervention.

Gordon Denlinger, state director for the National Federation of Independent Business, said the $15 per hour minimum wage proposal doesn't take "economic realities" into account. NFIB has 12,500 small-business members in the state.

"Many small businesses like restaurants or small shops simply cannot afford to hire inexperienced or unskilled workers at a rate of $15 per hour," he said. "The business owner may not be able to raise prices because customers won’t pay a higher price. The employer is forced to reduce hours or eliminate jobs. You can’t change the nature of the marketplace and what people will pay for a product."

The Pennsylvania Chamber of Business and Industry argued that there is a "disconnect" between rallies to boost minimum wage and what employers are experiencing.

"We need a more thoughtful discussion on how to target support without triggering negative impacts on employment," said Alex Halper, director of government affairs for the state chamber. "Every year it's a debate over a number. I think we're losing sight of whether this is the most effective policy."

“If there isn’t enough coming into the business to cover the added labor costs, those lower-level jobs disappear," Denlinger said. "An October study of the Seattle situation showed that is just what can happen. As a result, it’s much harder for those at the very bottom of the pay scale to ever find work. That’s not good for employers or employees, and it’s not good for Pennsylvania’s economy. It actually hurts those it may be intended to help.”

The Pennsylvania State Education Association applauded the governor.

The union said the governor’s plan will lift wages for many PSEA members who work as classroom aides, custodians, maintenance staff and office secretaries.

As part of his announcement, the governor also proposed that the state transition to one minimum wage for all workers. Tipped workers, for example, make $2.83 per hour plus tips. The tipped wage has not changed in 21 years.

"We can't ignore the million low-wage workers in Pennsylvania that are working hard but come up short every month," said Rep. Patty Kim (D-Dauphin), who has made minimum wage a top priority since her election to the House in 2012. "They're not living paycheck to paycheck but rather half of a paycheck to half of a paycheck."

Kim has a new minimum wage proposal circulating in the House.

Last year, the governor signed an executive order to raise the minimum wage for employees under his jurisdiction to $12 per hour. The wage will gradually rise to $15 per hour in 2025.

Editor's note: This story has been updated with additional reporting by Stacy Wescoe on comments from officials from the Greater Lehigh Valley Chamber of Commerce, the Lehigh Valley Economic Development Corp. and the Pennsylvania Chamber of Business and Industry.

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Write to the Editorial Department at editorial@lvb.com

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