HARRISBURG, Pa. -- Hoping it will lead to greater reform on Pennsylvania's minimum wage, Democrat Governor Tom Wolf signed an executive order Monday, increasing the minimum wage from $7.25 to $10.15 an hour for state employees and those who do work contracted out by the state.
Governor Wolf making the announcement alongside a dozen Democratic colleagues in the State House and Senate, including Rep. Patty Kim (D-Harrisburg), Sen. Christine Tartaglione (D-Philadelphia), and Sen. Daylin Leach (D-Montgomery) who all have sponsored bills proposing to raise the minimum wage sitting in committees.
Monday's executive order signing will impact less than 1-percent of state workers, 450 of approximately 79,000, Wolf said. He estimated it would cost $1.6 million, money which will come out of respective agency general funds.
Currently, Pennsylvania's $7.25 minimum wage is behind 29 states. In his most recent budget address, Gov. Wolf proposed to raise the minimum wage statewide to $10.15, which would place Pennsylvania as the highest minimum wage in the nation. Raising the wage across the commonwealth, Wolf said, would impact 1.2 million people and generate roughly $60 million in revenue.
"It also boosts morale when you pay a fair wage," Wolf said. "It increases productivity. It reduces job turnover and when you have a reduction in turnover, you reduce costs associated with turnover like job training."
Raising the minimum wage may sound like a boost to the economy, but it could actually take jobs away, says Gene Barr, President and CEO of the Pennsylvania Chamber of Business.
"It's not magic money," Barr says. "It`s not printed for free. It`s coming out of someone else's pocket."
According to a 2014 report from state's Independent Fiscal Office, a $10 minimum wage could lead to 31,000 lost jobs.
"It's simple economics. Whenever you make something more expensive in our own lives, you find ways, if you can, of using less of it," Barr says, adding in many instances, it's already visible with touch screen menu ordering at fast food restaurants.
According to Gov. Wolf's office, inflation-adjusted hourly earnings of the bottom fifth of Pennsylvania workers are lower today than they were in 1979. Pennsylvania has not raised the minimum wage statewide since 2009.