Not to be outdone by Murphy Pennsylvania Governor Wolf wants to ruin businesses in his state.

Does anyone know the Vegas odds on which Democratic Governor will bankrupt the most businesses in their state?  New Jersey Governor Murphy, New York Governor Cuomo and Pennsylvania Governor Wolf seem to be competing to see how many jobs they can chase from their state. 

On Wednesday, Governor Tom Wolf proposed raising Pennsylvania’s minimum wage to $15 per hour.  It’s the 5th time in 5-years that Wolf has urged lawmakers to raise the minimum wage.  Wolf signed legislation in June raising the minimum wage for state employees and contractors.

The Republican controlled legislature has (rightfully) opposed similar proposals saying a dramatically increased minimum wage could force small businesses to close.  Business advocacy groups in Pennsylvania such as the Pennsylvania Chamber of Business and Industry and the National Federation of Independent Business agree.  Business groups warn that employers, particularly small businesses, will be forced to lay off workers, raise prices, cut back hours or trim benefits to stay afloat. Higher wages also could cut into a business owner’s ability to invest in capital or an expansion.  It’s no surprise that raising the minimum wage has support from labor unions in Pennsylvania.

Wolf also wants the state to transition to “one fair minimum wage” for all workers including tipped workers in Pennsylvania.

Interestingly Wolf called the increased minimum wage a “jobs bill” at a Harrisburg press conference on Wednesday.  I’ll assume he misread the teleprompter and meant to say “Job killing bill”.  As Wolf spoke he was surrounded by Democratic lawmakers.  No Republicans attended his press briefing.  Since Republicans control the legislature in Pennsylvania that may be a sign that Republicans intend to protect Pennsylvania’s economy and again oppose Wolf’s plan for dramatically increasing the minimum wage.

In a prior blog post we talked about the negative impact on a dramatically increased minimum wage.  Economists have found that businesses pass the costs of a dramatically increased minimum-wage to their customers by raising prices.  Consumers, not business owners bear the burden.  This means that the poor (who an increased minimum wage is supposed to help) spend more on goods produced by minimum wage workers.  Consequently minimum wages raise prices on the poor.  It’s also been found that in states that have dramatically increased the minimum wage that some employers have not been able to afford the increased wage costs and have cut payrolls, put off new hiring, reduced hours or let workers go.  A 2013 study by Boston College economists showed that increasing the minimum wage leads to reduced employment which leads to an increase in thefts, drug sales and violent crime. Their results indicate that crime will increase as the minimum wage increases.

We are already seeing fast food giants like McDonalds move to automated kiosks (McDonalds has said they will automate 1,000 restaurants per quarter over the next two years with self ordering kiosks).  One only has to go to a big box retailer or chain grocery store and look at how many self-service checkout lines are available vs. cashiers.  Technology is already killing entry level minimum wage jobs.  I anticipate that a raise in the minimum wage to $15 per hour will rapidly continue that trend.

McDonalds

I don’t understand why Democratic politicians do not realize that talent drives wages.  Skilled workers are always in demand (even in a down economy) and command their worth.  Dramatically increasing the minimum wage is a form of welfare subsidized and forced upon employers.  Why are we rewarding people for not taking the initiative to better their education and skills.

Rather than put the burden of a dramatically increased minimum wage on employers and consumers why are Democrats not focused on job skills training?  Let’s help those who want and need to earn higher wages make themselves more valuable to employers.  Let’s put the responsibility of earning a higher wage on the employee by increasing their skills and value to employers not on businesses and consumers by increasing  costs.  Let’s not make minimum wage jobs career opportunities but part of a path.  Let’s set a better example and show the youth that minimum wage jobs are not career choices but simply a step.

These elected officials need to put in the work to come up with a better plan.  Let’s put the burden of increasing skills and value in the job market on employees not employers.  Let’s make our region a magnet for industry by increasing the skilled labor pool and making compensation market driven as it should be.

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