Sen. Browne’s plan is best way to increase minimum wage
A proposal by two Republican state senators to increase Pennsylvania’s insultingly low minimum wage is a good compromise and deserves support from the Legislature and governor.
Sens. Pat Browne of Allentown and Dan Laughlin of Erie said recently they intend to introduce legislation that would raise the minimum wage. It would go from $7.25 to $10 and increase in the future based on inflation.
The fact that the legislation has the backing of Browne, chairman of the Senate Appropriations Committee, means there is a good chance it could get through the Senate.
Pennsylvania’s minimum wage hasn’t been increased since 2009, when it was raised to $7.25 to align with the new federal minimum wage at the time.
Twenty-nine states have a minimum wage that exceeds the federal minimum. Twenty states increased their rates this year, including neighboring New Jersey ($12), New York ($12.50) and Maryland ($11.60).
Democratic Gov. Tom Wolf repeatedly has called for $15. His current proposal is for it to be hiked to $12 this summer and gradually increased to $15 by 2027.
His plan has no chance of passing in the Republican-controlled Legislature. They have ignored his previous calls, and they are going to ignore this one, too.
The offer by Browne and Laughlin is an opportunity to compromise. Browne told me he is not wedded to the $10 figure, that it is only a starting point, with the final figure subject to negotiations.
“It’s something that we need to act on now,” he said. “It just requires us to find a place where everyone can be comfortable as to what the appropriate amount is.”
The Senate passed legislation in 2019 to raise the minimum wage incrementally to $9.50 in 2022, in exchange for an agreement from the Wolf administration to hold off on making more employees eligible for overtime. The state House did not act on the legislation, though, and Wolf moved ahead with expanding overtime eligibility.
Browne said a key piece of this legislation is the inflation adjustment. He said that would take this issue out of “the political rumble.”
“Rather than constantly leaving it to the same debate, it’s my opinion that we should put that behind us and look to make it something that people will understand, that businesses will find to be more certain and we can set a permanent policy.”
Other states have done so.
Wolf ’s spokeswoman told me the governor believes more than $10 is necessary.
“We are pleased that raising the minimum wage is gaining support among some Republican legislators,” spokeswoman Lyndsay Kensinger said. “We still believe that Pennsylvania workers need a $12 wage with a path to $15, as red states like Florida do.”
The minimum wage must be raised. It should be raised nationally, but fat chance of that happening.
So it’s incumbent on Pennsylvania to do it for its residents. Working for $7.25 an hour is insulting, regardless of how menial the job may be.
That’s barely two gallons of gas, and not even enough for some fast-food meals.
I think more than doubling the rate to $15 would be too high, though. I wonder if that would backfire and cost people jobs, as businesses reduce staff and turn to automation. Checkout clerks already are outnumbered by self-service checkouts at times at some grocery stores and big box stores.
Recent research by the nonpartisan Congressional Budget Office reinforces my fear.
Raising the minimum wage to $15 an hour by 2025 would cost an estimated 1.4 million jobs, according to its report in February.
It also, though, would lift an estimated 900,000 people out of poverty and raise income for 17 million people.
How do you reconcile that?
Try compromising with a lesser increase. Low earners would have more in their pockets, and the cost would be more affordable for their employers.
I have no sympathy for corporate America. It’s full of filthy rich executives who keep getting richer, while those who toil for them and make them rich don’t often get a fair share.
If corporations have to part with more of their profits or dividends to correct that inequity, so be it.
A lot of businesses in Pennsylvania are paying entry level workers more than $7.25, in some cases more than $10. Target pays a minimum of $15. Many businesses can afford it. They just don’t want to do it.
We should be concerned about the impact on smaller, local businesses, though. They may operate on a slim margin and not be able to afford paying their workers more, unless they raise prices and risk losing customers.
That’s especially concerning now, considering the hit that small businesses have taken during the coronavirus pandemic.
Even those smaller businesses often are paying more than the minimum. According to testimony at a recent state
House Commerce Committee meeting, only about 1.5% of Pennsylvania workers earn minimum wage. There are about 91,000 of them. More than half work in restaurants.
Businesses often have to pay more than required to build a reliable workforce. Employees will switch jobs repeatedly to make a little more. And they have ample opportunities, with so many businesses looking for help.
But just because workers are earning more than the minimum wage doesn’t mean they are making much more.
About 8.6% of the workforce earned less than $10 an hour in 2018, according to the Pennsylvania Independent Fiscal Office. About 19% earned less than $12.
Wolf says raising the wage to $12 would inject an additional $116 million into Pennsylvania’s economy. And raising it to $15 would inject $321 million.
Could raising the minimum wage drive up the price of goods and services? Sure.
The Independent Fiscal Office estimated that 65% of all income gains by employees would be paid for by higher consumer prices.
But I don’t see them rising substantially. Competition would keep that in check.
And taxpayers would benefit because the state would pay less in services such as Medicaid and children’s health insurance because fewer families would qualify, according to the Independent Fiscal Office.
There are trade-offs, but those tradeoffs are worth it.
Let’s not let this opportunity slip away.
The governor and Legislature should adopt Browne’s compromise plan in the state budget to be adopted in June.