Higher wages would hurt small business

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A Dec. 22 editorial (“Minimum Impact: Low-Paid Pennsylvanians Deserve a Better Wage”) that calls for state lawmakers to raise the minimum wage plays down the impact that this cost increase would have on businesses.

The reality is that the employers most likely to pay the minimum wage are small-business owners, who on average make $50,000 a year. Interestingly, a 2012 state Department of Labor and Industry report shows that more than half of minimum-wage earners live in households that make more than $50,000 a year; a third live in households that make $75,000 or more.

While many newspapers, including the Post-Gazette, editorialize in favor of a wage increase, the law contains exemptions that preclude them from having to pay the minimum wage to certain employees. The same is true of other groups that support minimum-wage hikes — e.g., the now-defunct social advocacy group, ACORN. In 1995, ACORN sued the state of California for exemption from the state’s labor law, arguing that the more it had to pay for minimum wage or overtime, the fewer workers it would be able to hire.

Businesses would experience a similar outcome. The more that businesses are required to pay, the fewer jobs they’ll be able to create or retain, and the businesses that are creating jobs may be less inclined to select lower-skilled or less-experienced candidates. This will leave behind the very workers that a minimum-wage increase is supposed to help in the first place.

It’s also worth nothing that the Earned Income Tax Credit program already exists to help those low income workers without adversely impacting the business owner or causing job loss.

It’s important to have a constructive discussion on how much employees should be earning. But the fact remains that the minimum wage is designed to be an entry-level wage, not a government mandate.

President and CEO
PA Chamber of Business and

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