As budget season approaches, Democrats keep pushing for minimum wage hike

By: - May 24, 2019 6:30 am

Rep. Patty Kim, right, talks with Andrea Grove, owner of Elementary Coffee in Harrisburg on Thursday, May 23, 2019. (Capital-Star photo by Stephen Caruso)

With a line of caffeine craving-customers looking on, state Rep. Patty Kim, D-Dauphin, took a moment to chat with the coffee connoisseur across the counter.

At Elementary Coffee in Harrisburg’s Broad Street Market, Kim was meeting with stall owner Andrea Grove, to try to prove that raising the minimum wage isn’t the job-killer that pro-business groups and legislative Republicans claim that is is.

In fact, you can just ask Grove. Despite not even having her own brick and mortar store — that comes in July — Grove said her workers get paid a competitive wage, and one higher than Pennsylvania’s current minimum.

“Our business is based on equity,” Grove said Thursday. “If you’re not thinking about your employees … it’s a shame.”

Pennsylvania’s current minimum wage is $7.25 an hour, the federal minimum, which hasn’t been raised in a decade.

Another 31 states also follow the federal minimum. All six of Pennsylvania’s neighboring states have a higher minimum wage, by at least a dollar an hour.

Elementary’s entry level baristas get $12 an hour. That wage can rise to $13.50. And on a busy weekend day with tips, employees might bring home close to $18.

When her new shop opens on North Street near the Capitol, Grove said she’s hoping to also provide employees with health insurance coverage.

“When Elementary makes more, our employees make more,” she said. “And that’s the way it should be.”

Kim’s event came on the cusp of budget season, when the General Assembly leaves few stones unturned while putting together a fiscal package that funds the government, checks off leadership priorities and can garner the votes to pass in the Senate and House.

Gov. Tom Wolf’s 2019 budget proposal calls for an immediate minimum wage hike to $12 an hour from $7.25 this year, followed by staggered growth to $15 by 2025. The Democratic administration hopes for additional tax revenue from an increased wage, as well as reduced state spending human services — because fewer people would require them.

According to the state Independent Fiscal Office,  nearly 2 million workers would see wage increases under the plan in 2019 alone. It would put an additional $3.2 billion in income after taxes into their pockets.

The March 2019 report by the fiscal watchdog agency also projects that 33,000 people would lose their jobs. Of the jobs lost, 26,000 are projected to be part-time positions.

“Should I raise a million peoples’ hourly rate and lose 33,000 jobs? We have to pick and chose our battles, but in the long run, this is going to be beneficial for Pennsylvanians” and the state’s budget, Kim said.

The IFO projects $50 million in additional tax revenue from workers with more to spend. State agencies are estimating declining spending on Medicaid, but offsetting expenses on childcare and CHIP.

The overall impact on job, income, and prices of raising the minimum wage is a hotly debated subject among economists.

Most agree that there will be some some job losses, but the scale is up for debate. An increase in pay for workers is also agreed on, while the severity of price increases is also debated.

But any risk of eliminating jobs is driving GOP reluctance to increase the wage, according to Mike Straub, spokesperson for House Majority Leader Bryan Cutler, R-Lancaster

“Negotiations on the minimum wage are on-going as part of the budget process,” Straub said in an email. “As are discussions on finding ways to increase job training opportunities and access to education so those on the lower end of the pay scale can gain access to jobs already paying well beyond minimum wage.”

Senate Republican leadership previously called a $15 wage a “non-starter” but signaled they could talk about a more modest increase.

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.