Mimimum wage dance: This time, a modest hike doable
It’s like clockwork. The month is June, the state budget is being negotiated and a hike in Pennsylvania’s minimum wage is a bargaining chip.
Pennsylvania is one of 21 states with a minimum wage of $7.25 an hour. All of the neighboring states have a higher minimum wage.
Thanks to the state’s strongest economy in years, Pennsylvania’s budget situation is not as grave as it has been in recent years. So the time is right for both the Democratic Gov. Tom Wolf and Republican majorities in the state House and Senate to discuss the minimum wage on policy rather than political terms.
Wolf has proposed a giant hike to $12 an hour in the minimum wage, then annual adjustments of 50 cents an hour to bring it to $15 an hour by 2025.
In our view, such a radical increase in the minimum wage would deliver a negative shock to Pennsylvania’s employment rolls. Most of the state is made up of small businesses that don’t have the profit margin to handle nearly doubling of the minimum wage.
They would not be able to afford $12 an hour for entry-level workers and would simply stop hiring new employees, the very people who need to get in the work force and begin advancing up the job and wage ladder.
In fact, at $12 an hour, some small businesses would have to lay off employees.
Moreover, attaching automatic increases over multiple years to Pennsylvania’s minimum wage presupposes something that never happens in the state — a stable economy.
That said, the time is right for a modest increase in the minimum wage and lawmakers on both sides of the aisle should use the budget negotiations as the platform to make it happen.
Just don’t shock the mom-and-pop businesses that are the heart of Pennsylvania into an employment freeze and layoffs.