Proposed Minimum Wage Hike Discussed at Budget Hearings

From PA Chamber of Business & Industry

Among the notable budget hearings in Harrisburg last week included the House Appropriations Committee meeting with the Department of Community and Economic Development where Secretary Dennis Davin estimated no jobs would be lost if Pennsylvania raised the minimum wage to $10.10 an hour. According to a Pennsylvania Legislative Services story, Davin said in his experience meeting with companies that pay various levels of compensation, the only effect of a higher minimum wage would be to “raise people out of poverty.” Davin was also asked if any analysis was done on the impact that the proposed retroactive increase to the Personal Income Tax would have on small businesses in the coming year’s budget (Gov. Wolf wants to raise the PIT by 11 percent and make it retroactive to Jan. 1). Davin said Pennsylvania’s PIT is second lowest among those states that have one, and would rise to only the third lowest after the increase. He said he thinks it is competitive and stressed DCED’s job is to look at the whole picture. The minimum wage was a central topic in the Senate Appropriations Committee’s budget hearing with the Department of Labor and Industry. Secretary Kathy Manderino said the Department of Revenue estimates an increase to $10.10 an hour would generate $60 million in sales and income revenue and reduce the number of people in poverty. Sen. Mario Scavello, R-Monroe, doubted these statistics and said the focus should be on creating jobs, which in his region has increased the average wage. Democratic Appropriations Chairman Vince Hughes, D-Philadelphia, said every surrounding state has a higher minimum wage than Pennsylvania and has higher levels of job growth. “I would suggest that we kick start much harder the drive for raising the minimum wage in Pennsylvania,” Hughes said. “Those who are opposed to raising the minimum wage have a philosophy that just wants to keep people in poverty…we’re going to fight and I’m glad this governor has decided to stand up and fight to raise the minimum wage in Pennsylvania.” On Monday, Governor Wolf signed an executive order raising the minimum wage for employees under the governor’s jurisdiction to $10.15 an hour. The order also covers employees of organizations that negotiate state contracts or that lease property to the commonwealth. This provision will take effect when contracts or leases are solicited or bilaterally modified on or after July 1, 2016.