Pennsylvania’s leading small business advocacy association, the National Federation of Independent Business (NFIB), is sounding the alarm over a proposed new bill in the state House, HB 1135, that would hike the Pennsylvania minimum wage to $21/hour. The legislation is not yet scheduled for a hearing in the House but has overwhelming support within the one-seat Democrat majority.
This newly dropped bill, sponsored by Philadelphia Democrat Christopher Rabb, would raise the minimum wage in Pennsylvania to an astonishing $21/hour for minimum wage workers. While the proposal is concerning on many levels, the most troubling aspect is the wide-ranging support from 35 other Democrat members of the Pennsylvania House of Representatives. Members, such as Rep. Justin Flemming (D-Dauphin County), who don’t represent overly progressive districts, have signed on with their full support.
Are these elected officials crazy, or are they just pandering to voters by submitting outrageous proposals? Nearly tripling the minimum wage to $21/hour would mean that the average full-time minimum wage worker would receive an annual salary of $43,680. Read that dollar figure again. $43,680 for the entry-level teenager just learning the soft skills of employment.
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The minimum wage was never meant to be a lifelong wage, and with the help of the pandemic wages have far surpassed $7.25. According to Pennsylvania’s Independent Fiscal Office, “…the data suggest that the effective market minimum wage is roughly $10/hour.” Now, 35 Democrats want to more than double the market minimum wage, and triple the statutory Pennsylvania minimum wage, to $21/hour.
Drastically raising labor costs will continue to drive inflationary pressures, leading to much higher consumer costs for goods and services. Can you imagine what your groceries, dining out, fuel, and other costs will skyrocket to? Whatever some lawmakers in Harrisburg may think, small business owners aren’t out at sea in their yachts drinking champagne. They can’t afford this proposal. The Commonwealth can’t afford this proposal.
This ill-informed bill comes as small business owners struggle to find workers, with 45 percent (seasonally adjusted) of all owners reporting job openings they could not fill in the current period, according to NFIB’s monthly jobs report. The share of owners with unfilled job openings exceeds the 49-year historical average of 23 percent. Of those hiring or trying to hire, 92 percent of owners reported few or no qualified applications for the positions they were trying to fill.
Greg Moreland is the state director of the National Federation of Independent Business (NFIB) in Pennsylvania, a non-profit, non-partisan, organization representing 13,000 small businesses throughout the Commonwealth.
since the democrats control the state this is just the beginning. how much more in taxes will this hike cost the employee and the employer? just wait until they increase the PA sales tax and the state wage tax.
Clearly, the proposed legislation is short-sighted. It should be obvious to everyone that the minimum wage in PA should be $481/hour. That way, everyone working a full-time job would make a million dollars a year. Imagine! Everyone working in PA would be a millionaire in just a year. People would flock here from all the other states in order to have their shot at becoming wealthy, and by just obtaining a minimum wage job. What could go wrong?
John, I completely disagree with you, or ignoring the impact of federal and state taxes. That hour wage of $481 needs to be grossed up by 50% so that all PA workers will earn $1M after taxes.
Over 68 years I have watched increases in the minimum wages do a number of things: push up prices as the new wage level is passed through to the consumer, reduce the number of opening level jobs for the young and the unskilled as the additional wage cost to the business is absorbed by eliminating as many jobs as practical, eliminate small business that don’t have the previous options. When I went into the workforce in an actual non-newspaper delivery or lawn-mowing capacity, I made 60
cents an hour and I paid social security tax on that. I have come to the conclusion that raising the minimum wage is not an activity designed to make the worker prosperous, as much as a means of bragging to constituents, virtue signaling and eliminating pesky small business. Politicians, both Democrats and Republican (mostly Democrats) are not upset by the loss of businesses, the more workers are dependent on government, the easier it is to control the citizens.
I believe this proposal to be an opening shot and not a serious one at that. The states abutting Pennsylvania all have higher minimum wage levels, and it’s about time that Pennsylvania take a hard look at it since it’s unlikely that we will see serious movement on the Federal level. Take the current minimum wage in PA ($7.25, adopted in July 2009)) and increase it by the social security cola for each of the intervening years. Then include in the legislation wording that guarantees an automatic annual increase equal to the social security cola, and sunset the provision in 15 years from the date of enactment. That would raise it to $9.32/hour now, and leave it out of politics until 2038.
What jobs are out there actually paying the minimum wage? I would think most employers offer higher than the minimum wage to attract much needed employees. $15 to $17 per hour seems to be the advertised wages at the local grocery stores. Usually 1/3 is lost to taxes anyway. And employers have to match the social security tax.
I looked up christopher rabb and justin flemming on both Wikipedia and their own individual websites. What I learned is that rabb is described as a politician, professor and author, while flemming has spent the majority of his adult life “in and around state government as a public servant and as an advocate.”
Nowhere did I find any evidence that either man had ever started a small business, or actually provided employment to another citizen.
I agree with Mr. Viola. Tie minimum wage increases to the social security COLA increases, and leave POLITICS out of this.