HARRISBURG, Penn., April 6, 2006 (PRIMEZONE) -- The Pennsylvania Chamber of Business and Industry today said it was frustrated that House lawmakers added to the cost of doing business by approving a mandated wage hike.
Legislation (H.B. 257) passed by the House on April 5 would raise the state's minimum wage by $2 -- to $6.25 an hour effective July 1, 2006, and to $7.15 an hour effective July 1, 2007. The Senate must now consider the measure.
"The business community is troubled that the House has again acquiesced to organized labor and the Rendell administration on matters of bad public policy," said Floyd Warner, president of the PA Chamber.
Warner said mandated wages are job killers, noting the governor said as much as a candidate for office.
"Then governor-elect Rendell said raising the minimum wage at the state level would harm Pennsylvania business, forcing small businesses to close down, some to move to other states. Now, he says keeping the minimum wage at its current level is immoral, and that the increase will not hurt the economy."
Warner said this artificial inflation in labor costs will further damage Pennsylvania's ability to attract and retain job creators.
"$7.15 an hour is well above the rate of $6.35 an hour, which is the rate adjusted for inflation," he noted.
Warner said government's role is to help create a business climate that fosters job creation and business growth, not continue to find ways to make it more costly for businesses to operate or to add to the cost of maintaining and creating jobs.
"It's unfortunate that so many lawmakers have lost sight of what is truly needed to improve the lives of all working Pennsylvanians and voted instead to advance this flawed economic policy."
Warner said the impact of an increased minimum wage would fall particularly hard on small businesses, which are critical stepping stones into the labor force for many workers.
"Most low-wage earners work for small businesses, not large corporations," Warner said. "While small businesses create nearly three quarters of new jobs annually, they are also responsible for most job losses. Hefty health insurance premiums and other costs are already significant burdens for job creators. Adding a mandated wage hike to that volatile mix could push many over the edge, destroying jobs in the process."
Warner said proponents of raising the minimum wage have consistently used misinformation and widely varying numbers for those impacted by the bill in making their argument -- failing to mention that the very people a minimum wage increase is purported to help will be the ones who are ultimately hurt.
"If they cannot agree on the numbers, it's clear they have no idea of the financial impact on small business," he said.
Warner said the least skilled workers in the labor pool -- those for whom the minimum wage banner has been so aggressively waved and who most need to get and keep their feet on the first rung of the job ladder -- would be the first to lose their jobs.
"Unless business productivity increases sufficiently to generate enough revenue to pay for this 'tax,' affected businesses will have no choice but to cut their work force and spread the same amount of money over fewer workers," he said. "In turn, these low-skilled workers would also find it more difficult to enter the labor market since employers favor more highly skilled workers in the face of higher wages. If the bill eventually becomes law, some will get a raise. Others will get a pink slip."
Warner said if Pennsylvania truly wants to help people, it must reduce the barriers and mandates that are placed on employers and serve to inhibit job creation.
"Reducing taxes, enabling employers to provide affordable health care, and improving our legal and labor law systems -- all ideas being advanced by PA Chamber members in the Agenda for Jobs -- are the true sources of economic opportunity and advancement. This would do far more good than hiking the minimum wage, which would benefit some to the detriment of job creators and those most in need of employment."
The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with thousands of members statewide. More information is available on the Chamber's website at www.pachamber.org.
The PA Chamber of Business and Industry logo is available at: http://media.primezone.com/prs/single/?pkgid=353