Brief thoughts to ponder at length
Gov. Tom Wolf, in his annual budget address Tuesday last, yet again called for the Legislature to raise the state minimum wage, first to $12 an hour, then, in steps, to $15 hourly.
As per usual, he bemoaned the fact that states surrounding Pennsylvania have a higher government-dictated minimum wage. The implication is that the commonwealth somehow is at a disadvantage because of it.
But here’s another way to look at it:
Wages are a cost. The cost of doing business in Pennsylvania, at least using this metric, is lower than that of those surrounding states. Perhaps if the “The State” used that as a selling point to attract businesses, instead of a negative, the Keystone State economy might show additional signs of life.
United Parcel Service, better known simply as UPS, is a very – very – profitable package delivery service. Yet the Wolf administration is throwing $9 million at it to expand in Pennsylvania.
The administration touts how UPS will invest $1.4 billion to create more than 1,700 jobs in Cumberland, Dauphin, Northampton and Philadelphia counties.
As Wolf put it: “Our investment in this global company will not only ensure that customers across Pennsylvania will continue to receive the service they expect but also local communities will benefit from the combined creation and retention of thousands of good-paying, full-time jobs.”
But it’s not up to Pennsylvania taxpayers to ensure that UPS provides good service; that’s UPS’s responsibility. Just as it’s not Pennsylvania taxpayers’ responsibility to subsidize the payroll of this global behemoth.
Of course, the bureaucrats doling out your money will shout “But this is how business has been done for years!” But that doesn’t make it right.
Speaking of doling out money, the Pennsylvania Legislature has approved, in veto-proof fashion, a multimillion-dollar tax credit for new petrochemical and fertilizer plants that use commonwealth natural gas as their “feedstock.”
Great idea, right? Sorry, but no. And that’s no matter what provisions are attached requiring a minimum company investment and the number of jobs created. It’s simply should not be the function of “The State” to dole out public “incentives” to any private concern.
While one part of “The State” – the Wolf administration — attempts to add layer upon layer of taxation on one part of shale gas industry (in the midst of a serious retrenchment, no less), another – the Legislature – attempts to do what it does worst: Turn taxpayers into venture capitalists.
Noted one energy company CEO who’s considering building a methanol plant in northeastern Pennsylvania, the tax credit “will significantly improve the economics of the project.”
Diving into the tax coffers of “The State” usually does.
It’s just plain wrong.
As is another key provision of the tax credit deal. As the Post-Gazette reports it:
“The bill also requires a company to pay its construction workers the prevailing wage rate … .”
Never mind that such a state diktat markedly – and improperly — increases the cost of such projects. To wit, just last March, New York City’s Independent Budget Office calculated that prevailing wage edicts unnecessarily inflate costs by 23 percent.
Simply put, it’s long past time for “The State” to stop attempting to juice the marketplace with perversion after perversion. The rotting pulp that’s typically left behind is anathema to sound public policy.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (firstname.lastname@example.org).