Local Business Owners React to Calls for $15/Hour Minimum Wage
Currently, the minimum wage is $7.25-per-hour, where it rose in 2009 after a gradual phase-in from 1996’s $5.15. The COVID-19 pandemic has increased calls for helping American workers, but not everyone agrees that a minimum wage increase is the right course of action.
Gov. Wolf’s announcement for the increase in wages stated: “Creating a path to $15 will raise the incomes of more than 1.1 million Pennsylvania workers, provide better stability for women, rural, and tipped workers, and allow thousands of people to work their way off public assistance and strengthen the economy for everyone.”
Not everyone agrees that Wolf’s goal to help Pennsylvanians get out of poverty should go through minimum wage. For example, an article on PennLive.com quoted President and CEO Gene Barr of the Pennsylvania Chamber of Business and Industry as saying, “The administration’s aggressive proposal to more than double the state’s minimum wage to $15 will increase labor costs and lead to further job loss.”
Barr was not alone in his criticism. PennLive also quoted House Speaker Bryan Cutler (R-Lancaster) in saying that the goal is not necessary: “Rather than focus on the bottom of the pay scale, we will remain focused on helping Pennsylvania fully recover from the pandemic and help move Pennsylvanians out of low-paying jobs and into family-sustaining careers.”
Locally, business owners are discussing the increase in the minimum wage. While some were not willing to go one record, a few business owners analyzed the potential impact of the wage increase on small businesses.
“It’s not feasible,” explained Justin Forsythe, of The Washington House, in Fryburg, Clarion County. “If they take minimum wage to $15 an hour, the price of everything else will go up. Raising the minimum wage is not going to solve anybody’s problems.”
In Brockway, Jefferson County, Jacki and Shawn Whalin, of Scottish Heights Golf Club, pointed out that a global pandemic might not be the best time to talk about a wage increase.
“We think that an increase in the minimum wage to $14 or $15 per hour would devastate businesses that are currently struggling to rebound from a year of shutdowns and restrictions,” they said in an email. “Although we do agree that an increase is necessary, the timing could not be worse, and the amount proposed is very high, especially if you consider the cost of living for our area.”
Heidi Wise, co-owner of Heath’s Market in Oil City, Venango County, echoed the sentiments of Forsythe and the Whalins, explaining that “as a small business owner every dollar counts. I do understand that a livable wage is necessary, but if it (the increase) passes and minimum wage goes up to $15 per hour, I don’t know how we’ll keep our park time worker on.”
Wise added that Heath’s Market has “a handful of kids who help us out, and we love them, they’re great kids, but I don’t know how we could pay them all $15 per hour. I don’t know how we would keep the doors open at that point. This will put us and many other small business owners in a bind if it does end up passing. We’ve been throwing ideas around, and we might have to limit our hours if we can’t keep part-timers on staff.”
Many Republicans, including State Senator Cris Dush (R-25) in a town hall, as reported in The Courier-Express in 2019, pointed out that many businesses are already increasing their starting wage, for example, Sheetz starting its pay scale at $10. Walmart is also increasing its pay for many employees, and its starting wage is $11 per hour.
Wolf’s statement pointed out that many states are already increasing the minimum wage: “Nationally, eight states are on a path to $15, including our neighboring states of Maryland, New Jersey, and New York. Approximately 42 percent of the US workforce will have a $15 minimum wage by 2026. Two-thirds of Americans support a $15 minimum wage, according to a Pew Research Center survey. Pennsylvania’s workers must not be left further behind.”
However, opposition to an increase in the national minimum wage sound very much like the concerns raised by local businesses.
Scottish Heights has over 50 employees, and the Whalins pointed out that the majority of them are paid better than the federal minimum wage already because of the time they have spent with the business, as well as their experience.
Nevertheless, the Whalins added that “at some point, businesses will be forced to pass those costs on to their customers. Employers will try to find ways to survive. Unfortunately, it is usually by reducing their staff, which will result in fewer jobs.”
A Congressional Budget Office analysis found very similar results. While the increase would lift as many Americans out of poverty, it could increase costs and drive millions to lose jobs.
Area chamber representatives also voiced their concerns regarding the proposed increase in the minimum wage.
Tracy Becker, Executive Director of Clarion Area Chamber of Business & Industry told exploreClarion.com, “We completely understand the reason for the proposed increase, while at the same time we are concerned for our businesses that were hugely impacted by shutdowns and closures due to COVID-19. Businesses are still struggling to bring themselves out of the red while working endlessly to keep their doors open.
“Unfortunately 2020 was devastating for business owners and employees. I know that those unemployed due to COVID are working to find jobs. Those that have jobs, unfortunately are working paycheck to paycheck and struggle to make it. If they could look at a cost of living increase each year, that would be greatly appreciated. It would be a start.
“Our local businesses cannot afford to pay $15 or higher for minimum wages – they would either cut back on employees or worst have to close their doors. I personally don’t want businesses to close. But while I am thinking of the businesses, I am also thinking of the individuals working who are struggling. I think of my son, my nieces and nephews who could truly use an increase in minimum wage to pay their student loans, car payments and car insurance, house payments, groceries, gas for the vehicles to drive back and forth to work, their utilities, etc. What is the answer?
“Our employees deserve to be paid a good wage for the work they do. I don’t want them to struggle. What is the answer? I am at a lost, I truly am!” Becker said.
Venango Area Chamber of Commerce President Susan Williams believes that raising the minimum wage is inevitable and will happen eventually, although any drastic change in minimum wage will be a challenge for small businesses, whether it’s quick or a larger increase.
“I’m doing what I can to advocate for reasonable increases done more systematically than all in one fell swoop, but I’m also encouraging businesses to think about their current pay rates an how they will adjust, so they don’t let it catch them by surprise.”
“This year has shown that our businesses capable of figuring out solutions. Lots of our members already pay more than minimum wage across the board, and they may be able to help other business strategize and also show them the benefits of paying higher than minimum wage. That all has to be part of the conversation,” Williams said.
According to Executive Director of the Punxsutawney Chamber of Commerce Bob Cardamone, employers should pay wages commensurate with the work required.
He added that “employers should maintain the ultimate responsibility to control the criteria, including wages, which determine the overall success of their business.”
Cardamone agreed with Forsythe that “if increases in wages happen to quickly, the increase could be passed on to the customer.”
Limited changes to the current minimum wage may be warranted to reduce employee reliance on government provided benefits. However, increases should take place gradually, over years, according to Cardamone.
“If the minimum wage is increased, increases should be gradual to allow businesses to adjust operations. Employees earning less than commensurate wage will continue to rely on the government for tax subsidized benefits such as food, housing, medical, etc. In other words, the public subsidizes the employee,” Cardamone explained.
More information about the proposed minimum wage increase can be found at Gov. Wolf’s website.
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