The Pennsylvania Chamber of Business and Industry cautioned on Tuesday that raising the state’s minimum wage could actually lead to job loss and asked that legislators strive for better ways to alleviate poverty.
Alex Halper, director of Government Affairs for the chamber, warned of unintended consequences of a wage hike, including reduced hours, curtailed expansions, price increases and lost jobs.
“As we have heard from our broad-based membership—particularly our small business members—a mandated wage increase will have negative unintended consequences,” Halper said at a state Senate Labor and Industry Committee public hearing on efforts to raise the wage.
A February 2014 report from the nonpartisan Congressional Budget Office predicted that more than half a million positions could be cut nationwide with an adjustment to a $10.10 per hour wage. In Pennsylvania alone, the number was estimated at 30,000.
Historically, small businesses have been hardest hit by minimum wage hikes since they lack financial resources to absorb increased costs.
“There are simply smarter, more targeted ways to help low-wage workers than imposing arbitrary increases to entry-level wages,” Halper said.
He also noted that youth employment would be adversely affected, particularly in urban areas.
“It is clear that creating entry-level jobs and encouraging youth employment is critically important,” Halper said.
The chamber instead advocates for policies to help bridge the poverty gap by assisting low-wage earners through a transition via workforce development programs and Earned Income Tax Credit help.
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