Some lawmakers are looking at giving a raise to your employees--by mandating an increase to the minimum wage at Pennsylvania companies.
The Impact on Businesses
While all businesses would feel the impact, small business employers--who are most likely to pay the minimum wage--would be especially hit hard: on average they make just $50,000 a year. Businesses with such thin profit margins may not be able to absorb an employee wage hike, regardless whether their employees are full time or part time.
Who Really Would Receive the Increase?
According to a 2012 PA Department of Labor and Industry report, most minimum wage-earners in Pennsylvania do not fit the common description used by minimum wage advocates:
- More than half live in households where the income is more than $50,000 and a third are in households where the income is $75,000 or more
- 77 percent do not have children
- 75 percent are part time, including kids living with their parents and college students
- 25 percent are teenagers and more than half are under 24 years old
For those low income workers who truly need assistance, programs like the Earned Income Tax Credit and Pennsylvania Tax Forgiveness program were created--to provide help without adversely impacting the business owner or causing job loss.
The Impact on Jobs
The last time the state minimum wage was increased some companies reduced hours, eliminated jobs, or put hiring on hold because the price of labor became too high.
Designed as an Entry-Level Wage
The fact is that the minimum wage is designed to be an entry-level wage from which employees can work their way into higher paid positions, not a government mandate that fails to take into consideration a business' ability to pay. If businesses are required to pay higher wages immediately upon hire they may be less inclined to select lower-skilled or less-experienced candidates-- leaving behind the very workers that a wage increase is supposed to help.
We Are Working With Pro-Business Lawmakers
The Pennsylvania Chamber is actively collecting input from our members and will meet with lawmakers in the coming weeks to share businesses' concerns to stop this significant burden on business. Pro-business lawmakers understand the harm that this government action would have especially on smaller businesses, but they need to hear from business.
It is important for you to let us know what this type of increase to the minimum wage would mean for your business. Our ability to influence lawmakers will be greatly enhanced if we can share the perspective of actual business owners on how a mandatory raise of anywhere from 40 to 107 percent (as various proposals aim to do) would impact their business. Let us know!