HARRISBURG — Hearings on Gov. Tom Wolf’s $34.1 billion budget plan kicked off Monday with a volley of Republican attacks on the prospect of raising the minimum wage, signaling a tough road ahead for a new proposal the Democrat is backing.
The first House Appropriations Committee budget hearing featured members of the Republican majority repeatedly criticizing the broader impact of a minimum wage increase, including whether it would choke off the supply of entry-level jobs, squeeze small businesses or drive up inflation.
Rep. Martina White, R-Philadelphia, questioned whether higher minimum wage earners would still earn too little to live without public benefits, but then find themselves no longer eligible for the help.
The first testifier, Matthew Knittel, director of the Legislature’s Independent Fiscal Office, said his agency is working on an analysis of the latest minimum wage proposal that Wolf supports.
Since 2009, Pennsylvania has remained at the $7.25 federal minimum wage level, one of 21 states to do so, and the Republican-controlled Legislature has batted away Wolf’s proposals to raise it since he took office in 2015.
The latest Wolf-backed proposal would take Pennsylvania’s hourly minimum to $12 this year, putting Pennsylvania in line with the highest state minimum wages. Annual 50-cent increases would bring it to $15 an hour in 2025, lifting Pennsylvania into a group of 17 other states that have scheduled annual adjustments written into law.
Meanwhile, Pennsylvania would join a handful of states by eliminating its tipped wage minimum, now $2.83.
Those steps would boost pay for a million workers and provide savings in state programs for the poor, Wolf’s administration says.
The Independent Fiscal Office issued a report in 2015 on a previous proposal backed by Wolf to raise the minimum wage to $10.10 an hour. In it, the agency cited federal Congressional Budget Office estimates to conclude that raising the minimum wage would boost economic activity overall.
It projected higher prices and a loss of low-wage jobs, 3 percent or 31,000, but also broader wage gains for those above a new minimum wage.
In a later budget hearing, Wolf’s revenue secretary, Daniel Hassell, fielded questions about a minimum wage increase, too, and defended it, saying “there is a great deal of evidence that the effect on employment is not significant.”
Raising the minimum wage has backing from labor unions, Democratic lawmakers and some moderate Republicans, and public polling shows it tends to rate well among voters.
Rep. Matt Bradford, D-Montgomery, the House Appropriations Committee’s ranking Democrat, said Republican protests were “slightly disingenuous.”
In a forum Monday sponsored by the Greater Philadelphia Chamber of Commerce, Wolf told the crowd at Drexel University that his proposal would spur a big increase in demand and help curb the state’s subsidization through public benefits programs of employers who pay the lowest wages.
In a statement, the office of Senate Majority Leader Jake Corman, R-Centre, said the Senate GOP is open to discussing a minimum wage increase, but that Wolf’s plan “is not anywhere near reasonable.”
“Any increase must be structured in a way that minimizes the impact on employers, consumers and employees,” it said.
A spokesman for House Majority Leader Bryan Cutler, R-Lancaster, acknowledged that some caucus members support a minimum wage increase, but gave no sign that GOP leadership is interested in discussing a compromise.
Rather, the House GOP leadership is working on legislation to “help more workers transition from minimum wage work into good paying, family sustaining careers,” the spokesman, Michael Straub, said.