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State Legislators Push Minimum Wage Increase in Pennsylvania

Date: March 17, 2014

Move could cost the state tens of thousands of jobs

Like several of its neighboring states, Pennsylvania’s politicians are considering an increase in the state’s minimum wage. Currently, there are two plans being pushed, both by Democrats in the state House. State Rep. Mark Cohen of Philadelphia has proposed raising the minimum wage to $9 an hour, then increasing it every year to match the rise in the consumer price index for urban consumers for the Pennsylvania, New Jersey, Delaware and Maryland region, starting January 1, 2015. State Rep. Patty Kim, from the Harrisburg area, would raise the minimum wage to $9 an hour, followed by an increase to $10.10 a year later.

Gov. Tom Corbett, a Republican, has warned against the impact of raising the state’s minimum wage, acting as a backstop against any action on the issue by the legislature. However, he is up for reelection this year and facing a tough fight. There are a number of Democrats vying to unseat him, and polling shows that he would be the underdog in the contest.

What This Means For Small Business in Pennsylvania:

NFIB recently published a research report examining the impact of increasing the state’s minimum wage. It forecast that a wage of $8.75 or $9, adjusted annually for cost of living increases, would cost the state as many as 28,000 to 119,000 jobs over a ten-year period. In the report, Ken Shivers, executive state director of NFIB Pa., says, “The NFIB study shows that more than half of the jobs would disappear from the small-business sector in Pennsylvania. While minimum wage hikes are intended to help those below the poverty level, they will do just the opposite. Small-business owners will ultimately hire a more skilled employee rather than pay someone with no skills and no experience higher wages. Unlike corporations, small businesses operate on a slim profit margin and tough decisions will have to be made.” In an op-ed for the Harrisburg Patriot-News, Shivers also argued the negative impact of raising the minimum wage, arguing that it would kill jobs and potentially cause serious harm to those it aims to help.

Further Reading:

The AP has a story on the debate over raising the state’s wage, while the Carlisle Sentinel reports on Rep. Cohen’s bill. Philly runs an op-ed from a pair of economists arguing the downside to raising the wage in the state. In a separate piece, Philly also examines the push-back from the business community. KYW-TV and Philly report on rallies held to call for an increase in the minimum wage.

Do you own a business in Philadelphia? Become an NFIB member today and join 350,000 other entrepreneurs who are saving time and money through their membership.

Learn more about NFIB in Pennsylvania.

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