Gov. Tom Wolf is calling, again, for a statewide minimum wage increase. But the governor and his allies in the state legislature have upped the ante this year, proposing to raise the state’s minimum wage right away to $12 per hour, with plans to go to $15 by 2025. It would be nice to say this is just an April Fools’ hoax, but unfortunately, the real joke may be on many small businesses that will have to find a way to pay for drastically increased labor costs.
But it gets worse. The Governor’s proposal goes further by eliminating the tipped wage for all workers who receive part of their income from gratuities, requiring businesses to pay the full minimum wage for these workers, along with the taxes that go along with it. And after the minimum wage reaches $15 in 2025, automatic increases every year after that will be tied to inflation.
Opponents of the increase, including NFIB, have cited the job losses that will result when employers can’t absorb the costs. Pennsylvania’s Independent Fiscal Office (IFO) reported last month that, should the proposal become law, 34,000 workers will lose their jobs. Most will be younger and lower-skilled workers, who will be priced out of the job market and their chances to gain valuable job experience. The IFO report also states that the worst impact of the increase will be felt by small businesses in rural areas, where the cost of living is lower.
Pennsylvania State Director Gordon Denlinger commented on the IFO’s findings:
“This report is not a good promotional tool for those pushing for a $15 minimum wage in Pennsylvania and confirms what small businesses have been saying all along,” Denlinger said. “Smaller businesses take the biggest blow, especially restaurants and retailers and companies outside urban areas. It concludes that many business owners will cut hours, cut benefits and cut jobs when they can’t handle the higher labor costs of this significant increase.”
