Gov. Wolf renews push for higher minimum wage
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 through annual 50-cent increases.
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."
But Republicans and business groups oppose minimum-wage hikes, arguing that market forces, including a low unemployment rate, can boost pay without government intervention.
"Smart business owners and management in our region realize that it is critical in building a good workforce to pay people a living wage, well in excess of the minimum, plus benefits and working conditions to both retain and fill vacancies in their workforce," said Dave Black, president and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corp.
Black said a national or statewide minimum wage does not account for regional economic conditions. For example, the cost of living in rural parts of Pennsylvania is much lower than larger cities like Philadelphia.
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.
"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 also argued that there is a "disconnect" between rallies to boost the minimum wage and how employers would respond to higher labor costs. Alex Halper, the chambers' director of government affairs, said business costs would rise substantially, forcing employers to cut staff.
"We need a more thoughtful discussion on how to target support without triggering negative impacts on employment," Halper said. "Every year it's a debate over a number. I think we're losing sight of whether this is the most effective policy."
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.
This story has been updated to include comments from the Pennsylvania Chamber of Business and Industry and the Harrisburg Regional Chamber & CREDC.