What do local politicians and business owners say about minimum wage hike?

4 min read839 views and 97 shares Posted December 9, 2019

Pennsylvania’s State Senate recently passed a bill that would raise the state’s minimum wage for the first time since 2009. It is currently before the State House of Representatives, where its prospects are uncertain.

The proposal pending in Harrisburg would raise the state’s minimum wage in steps from $7.25 per hour, where it’s been since 2009, to $9.50 by 2022.

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The minimum wage across the United States is set by federal law, and is currently $7.25 per hour for non-tipped employees. That number was set in 2009, and hasn’t been raised or adjusted for inflation since. Pennsylvania raised its minimum wage to the same amount, at the same time.

That’s the floor – a minimum minimum. State and local governments can set higher minimum wages, and many have. As of July 1, 2019, 29 states had minimum wages above the federal amount. Pennsylvania is not one of them.

Lebanon County’s State Rep. Russ Diamond (R-102) and State Rep. Frank Ryan (R-101) will likely end up voting against the measure. Both oppose an increase.

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“I am generally opposed to government price controls of any kind. Our economy and competition for labor has rendered the minimum wage mandate virtually irrelevant, as few employers even offer minimum wage jobs anymore,” said Diamond. “I have no desire to artificially intervene by raising the minimum wage, which would only launch an inflationary ripple effect through the entire economy.”

Ryan agrees. “I am extraordinarily concerned that minimum-wage at the state level can do irreparable unintended damages to the very people we are trying to help,” he told LebTown. “I have spent part of my life earning minimum-wage and it provided me opportunities that I would not normally have had if those jobs were suddenly closed out to us.”

He added “[m]ost people earn well above the minimum wage. I would much rather have a government that helps people get better training and skills so that minimum-wage is never an issue. I would much rather we develop governmental programs to improve education and training skills for people.”

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Democrat Michael Schroeder and Republican David Arnold, candidates for the vacant 48th District State Senate seat, both support a $9.50 minimum wage, although for different reasons and to different degrees.

Schroeder thinks $9.50 an hour isn’t a big enough boost, but better than nothing.

“Half a loaf is better than none, but Pennsylvania workers deserve better. A recent New York Federal Reserve study found that raising the minimum wage in New York State caused a cascade of positive ripple effects throughout the economy. I look forward to working with my colleagues in the Senate to raising Pennsylvania’s minimum wage in stages to $15 per hour, and to pursuing additional measures to advance the interests of PA working people and their families.”

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Schroeder also favors indexing the minimum wage to the cost of living.

“The minimum wage should be increased as the cost of living increases, so that the purchasing power of Pennsylvania workers does not erode over time, as it has since the last minimum wage increase a decade ago. More study is needed to determine . . . the best way to measure inflation, but . . . the minimum wage should be pegged to inflation in a way that best serves PA’s working people and businesses.”

Arnold sees $9.50 as a compromise.

“I am generally supportive of the compromise legislation raising the minimum wage to $9.50 an hour which recently passed the state senate with overwhelmingly bipartisan support. I believe this modest increase in the minimum wage combined with the Governor’s agreement to withdraw proposed burdensome overtime rules on businesses is a win-win for both Pennsylvania employees and employers.”

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However, he “would not be supportive of an automatic minimum wage increase tied to inflation as this would have a negative effect on both small businesses and young Pennsylvanians looking to enter the workforce.”

In 2018, according to the U.S. Bureau of Labor Statistics, 1.7 million hourly workers out of 81.9 million nationwide, or 2.1%, were paid at or below the $7.25 minimum wage. BLS reported that they tend to be young, mostly under 25, and employed in service jobs in the leisure, hospitality, and food service industries.

In 2017, the BLS says 106,000 Pennsylvania hourly workers out of 3,415,000 hourly workers statewide, or 3.1%, were paid at or below minimum wage.

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2018 figures released by the Pennsylvania Department of Labor and Industry put the portion of Pennsylvania’s workforce making the minimum wage or less at 2.8%.

Although the percentage of workers earning the minimum wage is low, some in the staffing sector have asserted that increasing the minimum wage could have unintended consequences on the rest of the labor market.

“We believe the people calling for a higher minimum wage have all the best intentions,” said Glenn Rambler, owner of TempForce, a staffing agency based in Downtown Lebanon, in an email to LebTown. “But we believe policymakers are not see all the unintended consequences.”

Rambler noted that TempForce does not fill any minimum wage jobs, with all of its positions coming in at $12 an hour and above, and an average placement wage of $13.29. Rambler said that he does not believe an increased minimum wage would help workers or communities.

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“We’d love to tell our workers this would mean their earnings will go up, but we understand the reality is we will see our openings shrink, because companies cannot afford to hire or expand, choose to downsize or replace jobs with automation,” said Rambler.

Another issue brought up by the business community has been how a minimum wage increase should affect employees who may have previously received raises based on longevity, with the possibility that increasing the minimum wage leads to pressure for all wages to increase, not just new hires.

On Friday, Gov. Tom Wolf said that the state House of Representatives has until the end of the month to pass the bill, or he will green light a vote by the Democratic-controlled Independent Regulatory Review Commission to extend overtime pay eligibility to tens of thousands of workers.

The House reconvenes today.

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Davis Shaver contributed reporting to this article.

Full Disclosure: The campaign of Dave Arnold for State Senate is a current advertiser on LebTown. LebTown does not make editorial decisions based on advertising relationships and advertisers do not receive special editorial treatment. Learn more about advertising with LebTown here.

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