Wolf Again Calls For Minimum Wage Hike
SCRANTON — Gov. Tom Wolf’s proposal Wednesday to raise the state’s minimum wage from $7.25 to $12 an hour, making it among the highest in the nation, drew support from workers and labor unions and opposition from business organizations.
Wolf called for raising the $7.25 federal minimum to $12 an hour starting July 1, and thereafter adding annual 50-cent-an-hour increases until the minimum reaches $15 an hour in 2025.
University of Scranton economist Satyajit Ghosh, Ph.D. said a minimum-wage increase is not only long overdue, but also a matter of social justice to help workers on lower economic rungs earn a living wage. While an increase to $12 might seem like a big jump, Ghosh noted Pennsylvania’s minimum wage has been “stuck” at $7.25 since 2009. He called Wolf’s proposal practical and pragmatic.
“That is the right way of doing it, a gradual way of doing it,” Ghosh said. “I totally support it.”
Greater Scranton Chamber of Commerce President Bob Durkin said his organization has not taken a formal stance, but concerns likely would include impacts on smaller businesses, “where every dollar does matter,” and that a higher minimum could “close the door” on entry-level jobs for younger workers.
“It really does come down to this as a question of do you let the market determine things,” Durkin said. “There really is a give and take and if you put in an artificial number, it can affect the equilibrium of the market.”
Wolf also wants the state to transition to elimination of the “tipped wage” of $2.83 an hour plus tips — unchanged for 21 years. Tipped workers, typically women, are twice as likely as the overall workforce to live in poverty and nearly half rely on public assistance, said Wolf, calling the situation a “moral failing.”
He didn’t specifically suggest a new wage for tipped workers, but said there should be “one fair minimum wage for all workers.”
But Pennsylvania Chamber of Business and Industry President and CEO Gene Barr said many restaurants already operate on thin profit margins and doing away with tipped wages in favor of a uniform minimum wage would have “real world consequences” on employers and workers. Higher minimum wages would cause job losses that would most hurt very-low-income and lesser-skilled workers, he said.
“The intentions behind this proposal may be good but it is simply disconnected from reality for many Pennsylvania employers,” Barr said.
Ernie Schmid Jr., who has owned the S&W Restaurant on North Main Street in Wilkes-Barre with his brother Joseph for the last 18 years, said he’s 100 percent in favor of workers being paid higher wages, but doesn’t want to see it “end up in the government’s pocket” from more income taxes.
“The more the worker makes, the more the government is going to take out of their check,” Schmid said. “If everyone gets $12 an hour, just think how much more money that is for the state in income taxes.”
The Schmids employ seven people at their restaurant, where waitresses and servers are paid higher rates than the tipped minimum wage. If Wolf’s proposal passes, Schmid would have to tighten restaurant expenses and “adjust accordingly,” which would lead to higher prices, he said.
Wolf, a Democrat who recently started his second term, had first-term proposals for raising the minimum wage die in the Republican-controlled Legislature. A key question now is whether the new plan will suffer the same fate, Ghosh said.
“That’s the politics of it,” Ghosh said. “I applaud him for proposing it, but given the politics, I actually have no hope” it will pass.
Wolf’s proposal comes after most states, including Pennsylvania’s neighbors, have increased minimum wages above the federal floor. Wolf said a boost in pay for 1 million Pennsylvanians would grow the economy and save taxpayers hundreds of millions from tens of thousands of people working their way off of public assistance.
The SEIU Healthcare Pennsylvania union said Wolf’s plan would help home care and child care workers who work with the most vulnerable populations but barely earn enough to care for their own families.
The Pennsylvania State Education Association said Wolf’s plan will lift wages for many PSEA members who work as classroom aides, custodians, maintenance staff and secretaries.
During Wolf’s announcement in Harrisburg, home care worker Stephanie Williams of Philadelphia said raising the minimum wage would make a real difference for her.
“Just a couple more dollars an hour would allow me to do more than just survive from paycheck to paycheck,” Williams said. “I could afford rent on my own and wouldn’t have to choose which bill I can leave for next month.”
The Keystone Research Center, a left-leaning Harrisburg-based think tank, in 2018 found that raising the minimum wage to $15 an hour would lift wages for 2.1 million Pennsylvania workers who make up 37 percent of the state’s workforce, generate significant savings in the state Medicaid program and produce additional tax revenues.
Wico Van Genderen, president and CEO of the Greater Wilkes-Barre Chamber, said his chamber’s last survey showed 88 percent of respondents indicated strong support for raising the minimum wage. A minimum wage of $10 an hour was the most popular choice in that survey, favored by 32 percent of respondents, followed by 27 percent supporting a $12 wage. Current economic markets also help dictate wages, he said.
“For example, with a growing job market in our area with over 4 million square feet of business space built and being built, there will be a natural uptick in wages in our area to fill the thousands of new jobs created,” Van Genderen said.
In such an environment of economic growth, raising the minimum wage should benefit business, labor and the local economy, Van Genderen added.
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