Wolf’s wage hike does not compute

Wolf’s wage hike does not compute

“It’s been 10 years since Pennsylvania raised the minimum wage,” Gov. Tom Wolf lamented anew in re-announcing his plan to raise the state government’s dictated wage floor to $12 an hour from the current $7.25 hourly.

“It’s time to raise the wage,” he said of a proposal that will, thereafter, include annual hourly hikes of 50 cents.

The implication is that such an increase is needed to keep pace with inflation.

But, let’s run some numbers.

Hiking the minimum wage from $7.25 to $12 represents an increase of 65.5 percent.

An eventual increase to $15 an hour – which appears to be the goal, at least for now, of the governor and many others – would be a 106.9 percent increase.

Now, to a simple cost analysis.

That $7.25 in 2009 dollars would be valued at $8.68 in 2018 dollars (the last full year available for analysis purposes). That’s a 19.72 percent increase.

Again, Gov. Wolf seeks to raise the Pennsylvania minimum wage, immediately, by 65.5 percent and, once it hits $15 hourly, by 106.9 percent.

But average prices from 2009 through 2018 (the last full year available) rose by just over 17 percent. Yet, Wolf wants the minimum wage to rise immediately by a hefty premium above inflation.

Or, put another way:

“Wolf wants to raise the minimum wage almost four times the increase in consumer prices over the last 10 years,” says Jake Haulk, president-emeritus and a senior advisor at the Allegheny Institute for Public Policy.

It’s something to ponder as pandering pols pimp for a wage floor far in excess of the inflation rate.

What do they think they are doing, setting the cost of college tuition?

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).