Gov. Ed Rendell's push for a $2-an-hour increase in the state's minimum wage by 2007 is getting mixed reviews in Chester County.
Last week, Rendell rolled out the proposal during a telephone-linked press conference with minimum-wage workers and supporters in Erie and Philadelphia.
"Minimum-wage workers in Pennsylvania haven't seen a pay raise in eightyears, while the cost of food, heat, clothing, shelter and other basic necessities have increased steadily," Rendell said. "At today's federal minimum wage, workers have less buying power than they did in 1989."
"This issue directly affects the standard of living for 423,000 working Pennsylvanians," the governor said."The overall economic impact of this modest increase would boost spending in our communities by hundreds of millions of dollars."
But Robert Powelson, president of the Chester County Chamber of Business & Industry, said the governor's call for legislators to immediately increase the state's minimum wage to $6.25 an hour this year and then to $7.15 per hour by 2007, with a cost of living increase thereafter, is nothing more than "re-election posturing."
"After the (legislators') pay-raise debacle, this puts legislators in a dubious position," Powelson said, explaining it seems like political arm twisting. "You gave yourself a raise, how dare you not support a hike in the minimum wage?"
Meanwhile, organized labor weighed in on the side of the governor.
The Teamsters "strongly" support Rendell?s push to raise minimum wage, saidMark Muller, vice president and business agent at Teamsters Local 312, which has members in Chester County.
"There's no reason it shouldn't be increased," Muller said in a phone interview from his Chester office. "There are people who work a 40-hour week and are eligible for welfare. It's ridiculous."
Powelson said the issue would be especially dicey for pro-business legislators in this election cycle.
A government-mandated, minimum-raise hike would upset the state's economic apple cart, Powelson contended. Employers might not add a new entry-level employee if minimum wage is hiked up, or they might move the jobs overseas, laying off workers at home.
If they keep their workers, they might have to raise prices to offset the payroll-dollar increases, he said.
Most Chester County businesses already pay more than minimum wage thanks to the robust economy of the area, said Powelson, who believes the "free hand of the market" should continue to set its own level without government intervention.
The minimum wage hike is "ill-advised," Powelson said. "The administration is going well beyond the federal level."
The federal minimum wage has not been raised since 1997.
Muller does not buy the argument that companies will outsource or offshore jobs if the minimum wage increase is pushed through.
The types of jobs that pay minimum wage - fast food, hotel workers - are not the types of jobs that get sent to India, Muller said.
Since 1997 when the federal government mandated at $5.15 an hour, 18 states,
plus the District of Columbia, currently have minimum wage levels above that - Alaska, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin.
The last time Pennsylvania's General Assembly increased the minimum wage was in 1988.
Raising minimum wage $2 an hour won't poke a hole in the universe, say several other observers.
"The controversy has gone above and beyond its importance," said William
Stull, professor and chairman of the economics department at Temple University in Philadelphia.
It's all relative, Stull said. At $2 an hour, the impact would be small. If it were put to $15 an hour, that would be pretty big.
States surrounding Pennsylvania have already raised their minimum wage and businesses from those states did not flock into the commonwealth, Stull said. The reverse would be true, as well. Pennsylvania businesses won't pull up stakes and move away.
There could be some job loss or failed businesses but the numbers would be so small, they would be difficult to tract, Stull said.
State Rep. Arthur D. Hershey, R-13th, of West Fallowfield, and a lifelong dairy farmer, said he doesn't know where a business could find workers for only $5.15 in Chester County.
Hershey said he prefers the free market system, and will most likely oppose the legislation.
Gary Smith, president and chief executive Chester County Economic
Development Council in Uwchlan, also a dairy farmer, said he does not see any harm in raising minimum wage to $7.15, since most Chester County businesses already pay more than that.
Smith said he hasn't been able to get labor on his farm for less than $10 an hour since 2003.
Saying businesses can't pay the increase or will leave the state is a false argument, Smith said.