The Law of Unintended Consequences will come back to haunt Pennsylvania businesses, their workers and the commonwealth’s economy should the state nearly double the mandatory minimum wage by 2026, concludes an exhaustive analysis by the Allegheny Institute for Public Policy.
“If the Pennsylvania Legislature enacts, and the governor signs, a law requiring a $15 per minimum wage, it will make the state much more uncompetitive than it already is and lead to even slower economic growth and a loss of jobs,” say Jake Haulk, president-emeritus of the Pittsburgh think tank, and Frank Gamrat, its executive director.
Two primary issues arise with the higher wage-floor proposal.
“First, one of the major arguments for raising the minimum wage … is that some other states have already adopted the $15 minimum,” Haulk and Gamrat note. “But there is a huge fallacy in that argument, namely the vast differences in cost-of-living between Pennsylvania and its cities and cities in those states.
“Secondly, (there are) likely damaging impacts on lower wage industries,” stress the Ph.D. economists.
When comparing the minimum wage rates among states, cost of living obviously matters a great deal. The cost-of-living index is based on housing, transportation, food, entertainment and health care. These are critical elements when the argument turns on helping a person meet those needs.
“Pennsylvania’s cost of living is much lower than many cities and states around the nation, especially those with...
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