Minimum Wage; Maximum Ignorance

Gov. Rendell cozied up to his labor union buddies today with his push for an artificial increase in labor costs in PA of nearly 40%. (Remember, Rendell agreed with us in 2002 when he said that raising the minimum wage would hurt small businesses. But hey, its election time, and he needs the union cash come November!)

We’ll have a more formal response to Rendell’s economically ignorant policy proposal when the politicians return to work next week.

Rendell pressures Republicans to hike state minimum wage
1/19/2006, 5:59 p.m. ET
By MARC LEVY The Associated Press

HARRISBURG, Pa. (AP) — Gov. Ed Rendell and fellow Democrats on Thursday challenged leaders of the Republican-controlled Legislature to allow a vote on a proposed $2-an-hour hike of the state’s minimum wage and predicted it would pass.

Senate leaders said a vote on some minimum-wage bill is likely in the new few weeks, but House Republican leader Sam Smith has made no such commitment.

Meanwhile, a group of House Republicans have advanced a bill to provide a smaller increase of $1.10 an hour, to $6.25. A Republican senator has advocated an earned-income tax credit that he said would help poor families with children more effectively than a minimum-wage increase.

With the federal minimum wage at $5.15 since 1997 and the Republican-controlled Congress showing no interest in raising it, Rendell and the Democrats in the Legislature have made the issue a priority for this election year.

In a news conference, Rendell, Democratic legislators, organized-labor groups and advocates for a higher minimum wage made one last effort to get their message out before lawmakers reconvene Monday after a monthlong break.

Dawn Seabrook Brown, 36, a mother of two in Philadelphia who makes $6 an hour while she studies to become a registered nurse, said a higher minimum wage will give more people an incentive to work.

“It’s much more to look forward to,” said Brown, who participated in the news conference. “It matters. It saves lives. It makes people productive citizens. It turns neighborhoods into different, better things.”

The state Department of Labor and Industry says nearly 46,000 workers make between $5.15 and $7.14 — wages that Democrats say leave many people below the federal poverty level.
Republican leaders say the minimum wage should be raised at the federal level so that employers do not leave Pennsylvania for other states with lower wages. Business advocates say raising wages will force small business owners to increase prices or cut jobs. However, they acknowledge that public opinion polls tend to show a majority of Pennsylvanians favor an increase.

“It’s emotional, it sounds good, but you can’t deny the economics of it, and the economics are bad,” said Matthew Brouillette, president of the libertarian think tank, the Commonwealth Foundation.

Even if Republicans allow a vote on the issue, there is no telling what that legislation will look like.

Democrats want to move the minimum wage immediately to $6.25 an hour, then to $7.15 an hour in 2007. House Republicans, meanwhile, have proposed an increase to $6.25 an hour in 2007 while keeping 16- and 17-year-olds who are full-time students at the existing minimum wage.

Currently, 18 other states, including New York and New Jersey, and Washington, D.C., have raised their minimum wage above $5.15 an hour.