In his state budget address on Tuesday, Pennsylvania Gov. Josh Shapiro chastised the state Senate for not following the state House’s two latest moves to raise the minimum wage. (Another House push came this past week.)
In doing so, he touted that there would be grand savings in government assistance efforts.
“(R)aising the minimum wage to $15 an hour [from $7.25] will save this commonwealth $300 million a year on entitlement programs like Medicaid,” Shapiro said. “Not by adding arbitrary and cumbersome requirements that push people who still need help off the rolls but by literally raising the wages of nearly 61,000 people who currently rely on Medicaid and make less than $15 an hour.” …
“If you aren’t going to do this because it’s the right thing to do… because it would let more families put food on the table for their kids, then do it because it’s going to … shrink our entitlement budget by growing our workforce and putting more money back in our workers’ pockets.”
But, of course, arbitrarily doing so comes at a cost the governor no doubt purposely ignores.
It was in 2023 that the Employment Policies Institute (EPI), using standards it says were similar to those of the Congressional Budget Office (CBO), investigated the effect of increasing Pennsylvania’s hourly minimum wage to $15 and increasing the tipped minimum wage to $9 by this year.
EPI’s 2023 forecast was that 2026 wage and salary employment would be 5.74 million. If Pennsylvania’s minimum wage was increased to $15 and the tipped minimum wage was increased to $9 per hour, it estimated that 630,378 workers in the commonwealth would be affected — and 85,779 would lose their jobs.
So, Governor, how much will it cost Pennsylvania in lost tax revenue by raising the minimum wage to $15 an hour?
And, Governor, how much will it cost Pennsylvania taxpayers for the unemployment and other “benefits” for the newly jobless 85,779 former workers?
Oh, Governor, by the way, what would be the projected cost of potentially, theoretically, mind you, having to add, say, tens of thousands more people to state Medicaid rolls? Reverse-engineering your ciphering, that cost could easily more than double that $300 million in “savings” you were touting, correct?
Is that the “right thing to do,” Governor? And how much food will your minimum wage hike proposal take off Pennsylvanians’ tables? And how much extra will that cost taxpayers?
And as Jake Haulk, president-emeritus of the Allegheny Institute, asks:
“What would happen to prices for goods and services produced by low wage labor? How many businesses will be forced to close?
“Talking about clueless,” the Ph.D. economist says. “[It is] typical economic illiteracy on display.”
The great economist Thomas Sowell often reminded that “The real minimum wage is zero.”
Legendary economics journalist Henry Hazlitt stated the truism that “You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less.”
And former Speaker of the House John Boehner never hesitated to make the solid point of order that “When you raise the price of employment, guess what happens? You get less of it.”
Gov. Shapiro apparently wants to pay one heckuva price to get one heckuva lot less employment by pushing a 106.9 percent increase in the Pennsylvania minimum wage.
That’s some “record.”
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
