PA Chamber President Gene Barr testified to the economic consequences of mandated minimum wage hikes during a Senate Democratic Policy Committee hearing last week.
During his testimony, Barr said that minimum wage increases have historically proven to be detrimental to business growth and job creation and retention, particularly for small business owners. He noted that the Congressional Budget Office has shown that raising the federal minimum wage would lead to an estimated 1.3 million jobs lost, with that number possibly being as high as 3.7 million. At the state level, the Independent Fiscal Office has shown that an increase to $12 an hour could lead to the loss of 34,000 Pennsylvania jobs.
Barr cited other information – including from nonpartisan studies and state agencies that analyze relevant demographic data:
- A University of Washington study conducted after Seattle raised its wage to $16 an hour in 2016 showed that hours for low-wage employees in the city were reduced, and total payroll in such jobs declined.
- According to the state Department of Labor and Industry’s data, well over half of minimum wage earners are under the age of 25; a quarter live in households with income exceeding $100,000; and 78 percent have no children. Among those who do have children, the majority are married with a spouse who may very well serve as primary breadwinner.
During an extensive Q&A session with committee members, Barr said that minimum wage increases are a “blunt instrument” to help those living in poverty. A more targeted approach, he said, that does not risk job loss would be preferable, such as implementation of a state Earned Income Tax Credit. Barr also focused on his work as co-chair of Gov. Tom Wolf’s Workforce Command Center to help strengthen our state’s workforce development system and ensure that everyone in the Commonwealth – regardless of socio-economic status – has the chance to pursue a rewarding career path and the skills necessary to move upward through the workforce.
Lastly, Barr noted that one of the most important aspects of this discussion is for today’s youth to have the opportunity to develop the work experience and “soft skills” (e.g., showing up on time, communicating with coworkers and customers, etc.) that lay a foundation for future success. When minimum wage increases reduce jobs for young people, they are less likely to obtain the skills necessary to be more employable later in life. Central to the PA Chamber’s “Bringing PA Back” initiative is to ensure that Equality of Opportunity exists in rural and urban areas of Pennsylvania, which means availability of entry-level jobs.
Barr’s testimony was highlighted in this Bucks County Courier Times story, where he was quoted as saying that “We don’t believe it’s [minimum wage increases] the most effective way of driving assistance to those who truly need it.”