In his June 11 column, “Philly, other Pa. cities need state budget to address their needs,” John Baer described the strength of the Pennsylvania government’s financial position and discussed the governor’s proposal to raise the minimum wage in terms that made it sound like a good idea.
Baer points to the state’s “fat $813 million surplus.” That number reflects better than expected tax collections, but it isn’t the true difference between tax collections and spending. Gov. Tom Wolf overspent his budget this year: We don’t yet know the exact amount of the overrun, but estimates are around $700 million. That wipes out any surplus.
Baer seems to take at face value the claim that raising the minimum wage will alleviate poverty. Proposals to raise the minimum wage are a publicity tool, not a credible anti-poverty measure. There is no law that can guarantee people more income. If government requires an employer to pay an uneconomical wage he will hire fewer workers, use machines or cut hours. Indeed, the state’s Independent Fiscal Office estimated this proposal will cost Pennsylvania 34,000 jobs.
Moreover, the minimum wage is just a starting wage. Raising the minimum prevents younger, slower and less-desirable workers from getting a foot in the door to build their skills and earning power. That doesn’t seem like poverty alleviation to me.
Senior policy analyst