Montgomery County, Maryland failed to increase the minimum wage from $11.50 to $15 per hour after County Executive Isiah Leggett vetoed the measure. He called for an objective study to measure the impacts of a minimum wage increase. Unsurprisingly, the study showed the few benefits of a higher mandated minimum wage are far outweighed by significant job loss.
The report by PFM shows 47,000 workers would lose their jobs and $396.5 million in total income by 2022. Not only would this policy change hurt workers, but the county would lose $41 million in tax revenue, and payroll costs would go up by $10 million.
The Montgomery County report is just the latest example of how minimum wage hikes destroy jobs. The Independent Fiscal Office (IFO) estimated that a minimum wage increase would cost Pennsylvania 54,000 jobs. The IFO also estimates little in welfare savings from a $12 minimum wage increase—just $271 million, about 2 percent of overall human services spending. And this number is likely inflated because it doesn’t take into account the impact on wages just above minimum wage for health aides.
“Evidence-based policymakers” promise that a minimum wage increase will save the state money because employees will need fewer welfare programs, but it’s not playing out that way in Washington. Research from the University of Washington on Seattle’s $15 minimum wage hike shows negative results—a loss of $125 per month for the average low-wage worker.
Rather than mandating a wage increases to benefit a few workers, more prudent government spending policies will expand Pennsylvania’s economy and benefit all Pennsylvanians.