Pennsylvanians dodged a lot of bad policy in the final budget deal. One less talked about issue was the Governor's $10.10 minimum wage proposal. In the waning days of the budget stalemate the IFO finally analyzed how the increase would effect Pennsylvanians. NOt suprisingly they found large amounts of job loss, 33,000 and slight raises of 12% for adults who would retain employment by 21% for teens.
But what the IFO can't measure is how many businesses would shut down under the pressure of a higher minimum wage, leaving not just low-income workers, but there bosses and fellow employees out of a job. The latest from Seattle paints a grim picture of this reality.
Using employment data from the last five years, the American Enterprise Institute found that Washington state as a whole has seen an increase of about 5,800 restaurant jobs thus far in 2015, while Seattle has seen a decrease of 700 in the same time period.
Creating an economy where people can expect a liveable wage is important, but raising the minimum wage time and time again has proven to be a terrible poverty alleviation tool. If lwamakers want to spur wage growth they should consider reforms that tear down barriers to employment, such as lowering taxes on entreprenuers or reducing licensing and regulation required to start a business.