At a news conference in Philadelphia on Thursday, State Senators Mike Stack and Daylin Leach announced their intention to introduce legislation that will end the allowance of a sub-minimum wage for employees who receive tips and raise the overall minimum wage to $12 an hour.
Did he say $12 an hour?
“Makes a great sound bite, but it's a horrible policy,” said Kevin Shivers of the National Federation of Independent Businesses.
He says he is not surprised that Leach wants to raise the wage since he voted to raise his own pay back in 2005.
But he points out a study done by the Congressional Budget Office asserted that boosting the wage to merely $10.10 would cut 500,000 jobs across the country off the bat.
“Raising the cost of production, raising salaries is absolutely the worst approach to try to jumpstart the economy,” Shivers said.
Mark Price of the Keystone Research Center says it would be okay if the increases are done gradually.
“Modest increases, as long as they're staged, they're unlikely to have any adverse effects on employment, while still meaning that a lot of people are getting a pretty sizeable increase in earnings,” he said.
Price says there is a shortage of really good jobs in the current economy and the increase would help those who have families to support.
“There are a lot of folks who stay in these minimum jobs for years and they're not kids,” said Price. “They're older adults working for some very big enterprises…in fast food restaurants and they could really use the extra boost that comes with this.”
Shivers says there really aren't that many people on minimum wage jobs, but a large hike in that pay would hurt those who are, like teenagers and many disabled people.
“When you raise the starting wage for somebody who has no skill, you are pricing them right out of the market because employers are going to hire somebody with a little bit more experience,” he said.
“The tipped minimum wage is an archaic and overly-generous allowance for business owners at the expense of low-wage workers,” Leach said. “Still, it's not good enough for big restaurant chains who pile up thousands of wage law violations for not even paying the reduced wage. It's time to end this game.”