Allegheny Institute chief: Minimum-wage hike 'not a free ride'

While Pennsylvania considers raising the minimum wage, some groups are raising questions about the effect that doing so would have on the state's economy.

A recent study by the Keystone Research Center projected that raising the minimum wage to $10.10 would raise wages for 1.2 million Pennsylvanians and increase consumer spending by $1.8 billion, creating 6,000 jobs. 

However, Jake Haulk, president of the Allegheny Institute for Public Policy, called those claims “outrageous.”

“This is not a free ride. You can’t just say we’re going to wave a magic wand, raise everyone’s wages to $10 an hour and it’s not going to have any negative impacts,” Haulk said. If 1.2 million people would see a raise from the proposal, that money has to come from somewhere, be it higher prices, fewer hours or fewer jobs, Haulk said.

“(The minimum wage) is a red herring,” Haulk said. “Minimum wages, except where there are monopolies, don’t make any sense.” What does, Haulk said, is improving the standard of education so American workers are trained for higher-paying jobs and letting the free market determine their worth, which would benefit far more than minimum-wage workers, who only make up 4.3 percent of America’s work force. 

The low percentage of minimum-wage workers is why some groups, such as the York County Economic Alliance (YCEA), do not even see the minimum wage as an issue. “Many of our members already pay above the minimum wage,” Darrell Auterson, YCEA’s president, said.

Still, Gov. Tom Wolf has made raising the minimum wage a priority for Pennsylvania. One bill being considered, introduced by Democratic state Rep. Patty Kim (D-Dist. 103), would raise the minimum wage from the federally mandated level of $7.25 an hour to $10.10 an hour over two years. 

While almost 20 states have a minimum wage at or below that mandated by the federal Fair Labor Standards Act, only six and the District of Columbia have enacted legislation to raise the minimum wage to $10 or more, and none of those are currently in effect. 

“The Legislature is never going to pass it; the businesses of the state are never going to allow it,” Haulk said.

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Allegheny Institute

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