State Rep. Matt Gabler, R-DuBois, was asked at the recent Business Connections luncheon about his thoughts on a proposal to increase the minimum wage in Pennsylvania.
Gabler, who was the guest speaker at the Greater DuBois Area Chamber of Commerce event, said Gov. Tom Wolf’s proposal suggests that by increasing the minimum wage, the state would receive an additional $120 million in revenue.
“There are a lot of us that say regardless of what you think of minimum wage, regardless of whether you think it’s a good idea, bad idea, doesn’t matter,” said Gabler, “does $120 million really pay enough? When you try to backwards-plan that math to figure out how much economic activity needs to be generated so that you get 3.07 percent of that in income in order to get that $120 million dollars. The math doesn’t really seem to make sense there, that it’s actually going to generate that.”
Personally, Gabler said he thinks about how minimum wage affects Pennsylvania in terms of its ability to compete with its neighboring states.
“I would say that if all of our neighboring states were at the federal minimum like we are, and we were to go and bump it to $10-$12 dollars an hour, we’d really put ourselves in a position where we wouldn’t be able to pay for our own services within the state,” said Gabler.
Gabler said Pennsylvania is in the opposite situation, where most of its neighboring states have increased their minimum wage over the last few years to between $10 and $12.
“For us to go immediately to $12 and be right at the top of that would put us at a competitive disadvantage,” said Gabler, noting that he thinks eastern and western Pennsylvania have different economies which need to be taken into consideration.
“If we were somewhere up to $9, we wouldn’t be so far out of line with our neighboring states so as to put us at a competitive disadvantage with them,” said Gabler. “So then the question becomes what does that do for local employers? And that’s the conversation that needs to happen. I think that looking at the comparisons, $9 is not something that is so far out of the realm of economic reality, that we couldn’t discuss it. I think $10 and above is, and certainly $12.”
A fiscal analysis conducted two years ago when it was proposed to go to $12 over time, showed it would cause a net decrease in Pennsylvania’s economy of 33,000 jobs, said Gabler.
“Then they had an asterisk, and they said, ‘If the rate were to increase more quickly, then the job loss would be greater because there would not be time for the economy to absorb that.’ So, in this case we’ve got exactly that situation,” said Gabler. “So I mean, you could right now say if we went immediately to $12 we would lose greater than 33,000 jobs in the state. I think that that would be disproportionately on this side of the state, because we don’t have the cost of living that supports such a wage.”
Gabler also noted that there is a government proposal to eliminate the tipped minimum wage.
“The $2.83 — make it so now your servers, waiters, waitresses, servers, would also be making the $12 an hour, plus tips,” said Gabler. “Look, servers do a wonderful job and they deal with a lot of very difficult people. But, the wrench that that would throw into our economy as far as that shock, I’m not sure how that would be absorbed. We need to be very careful about that.”
“I think that if we ended up somewhere in the $8 to $9 dollar range, I don’t think it would kill us,” said Gabler. “But the question is, what does that look like? What are the other details associated with it? I’m asking for your feedback on that as well.”