HARRISBURG — One day after Gov. Tom Wolf unveiled a budget plan that calls for hiking the state’s minimum wage to $12 an hour, two economics professors told the House Labor and Industry Committee on Wednesday the move could hurt some of the low-wage workers it is supposed to help.
Wolf wants the state to raise the minimum wage to $12 an hour by July 1, then incrementally increase the minimum pay rate until it reaches $15 in 2025.
Minimum wage hikes may make winners out of some low-wage workers, but many others fare worse, said Antony Davies, associate professor of economics at Duquesne University.
Minimum wage hikes can lead to job loss, particularly among the “least-skilled, least-experienced” workers, Davies said.
He pointed to an experience at Duquesne. The university raised the minimum wage for its employees to $15 an hour. But after raising its minimum wage, Duquesne got rid of its parking lot attendants and replaced them with a swipe-card system for gaining access to the parking lots.
“It gave some workers a boost,” Davies said, “but for another group of workers, they didn’t get $15 an hour, they got nothing.”
The experience is typical, he said. To deal with increased personnel costs, employers raise their prices, absorb the cost increase or look to save money reducing the number of workers' hours.
There have been extensive studies of the impact of increasing the minimum wage in Seattle, said Matthew Rousu, dean of the Sigmund Weis School of Business at Susquehanna University.
Those studies found that even among workers who ended up getting raises, many had to deal with changes that made working more difficult. For instance, workers often found that they had to travel further to get to work, he said.
Seattle saw 11,000 jobs cut in the wake of the minimum wage hike in 2015, Rousu said.
“That's equal to the number of jobs lost in the city during the Great Recession,” he said.
Last week, Wolf said the experiences in other states suggest Pennsylvania could raise its minimum wage without negative economic impacts.
He noted that 29 other states, including every neighboring state, already has raised the minimum wage above the federal minimum pay rate of $7.25 still used in Pennsylvania.
Republican state Rep. Jim Cox, chairman of the House Labor and Industry committee, said he called Wednesday’s hearing to examine the implications of a minimum wage increase in response to Wolf's proposal.
Cox of Berks County said he hoped the academics’ testimony would be “foundational” to informing lawmakers about the issue.
But state Rep. Patrick Harkins of Erie County, the Democratic chair of the Labor and Industry committee, said research on the impact of minimum wage hikes is mixed.
He said future hearings should be “balanced” to reflect the disagreement.
Davies said any disagreement tends to be more about the degree of the impact of minimum wage increases.
“It’s like having a disagreement about how far Tom Wolf can throw a football, not over whether or not he plays football,” Davies said.
John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at firstname.lastname@example.org and follow him on Twitter @cnhipa.