PhillyDeals: Business group hits back on minimum-wage rise

Posted: January 07, 2014

Pennsylvania will keep its minimum wage the lowest among large Northeastern states, if the commonwealth's leading business lobby gets its way.

Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, liked my use of the phrase "brute force" to describe the role of government in trying to use a higher minimum wage to spread a little prosperity.

But that's about all the chamber chief liked in my Dec. 22 column noting some politicians here want to copy Maryland, New York, New Jersey, and other adjoining states that have started boosting base pay significantly above the federal $7.25 an hour.

A wage boost is increasingly popular among Democrats, who note that bank bailouts, business tax breaks, low interest rates, and high corporate profits have not increased hourly workers' pay or spending.

But, to Barr, higher-wage advocates like State Rep. Mark Cohen (D., Phila.) "seem all too easily to overlook the impact of government mandated wage increases on those in unskilled jobs or those still looking for that entry-level job."

Barr listed the basic arguments against forcing wages up: Some employers will cut staff or hours; many minimum-wage workers are young people not supporting families; some are children of well-off households who presumably don't need government mandates to keep their bellies full, a roof overhead, and a smartphone at hand.

The chamber's propaganda is a mirror image of labor advocates', featuring small-business owners as hardworking family men and women who deserve relief.

I asked Barr if the chamber was using those mom-and-pop shops as cover to protect the interests of high-profit, low-wage giants like Amazon, McDonald's, and Walmart.

"I don't hear a lot on this issue from the Walmart and Target types," and Amazon is not a chamber member, Barr said. "Most of the people I hear from really are small businesses. At fast-food shops, it's local franchisees (and customers) who eat higher wages," he added.

Barr says the chamber supports at least one national program that amounts to public assistance for low-wage workers: the federal government's Earned Income Tax Credit, designed to encourage work by giving low-income workers with families reduced taxes and, in some cases, writing them a check (a "negative minimum wage") to supplement their low pay.

Do higher wages always choke opportunity? Maybe some places more than others. It's a tougher argument to make in the fast-food and retail belt along suburban U.S. 202, where new Wegmans groceries and chain drugstores keep hiring, or at the busy city residential construction zones, where Irish and Latin American migrants flock to nonunion job sites, or in the "fulfillment center" warehouses just outside metro Philadelphia, where corporate websites list many openings at wages not too far above today's minimum.




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