HARRISBURG, Pa. (WHTM) – Governor Tom Wolf raised his pen Monday afternoon and with the stroke of it fulfilled a campaign pledge by raising the wages of all state workers to at least $10.15 an hour.
The executive order is mostly symbolic since it only affects about 450 of the commonwealth’s 79,000 employees immediately. Wolf had hoped the Legislature would’ve upped the minimum wage for all Pennsylvanians from the federal rate of $7.25 an hour. He got a thunderous applause as he affixed his signature to the order.
But not everyone in the building was pleased at what they see as a unilateral action by a governor doing an end run around the General Assembly.
“He’s using his executive power and he’s again waving his magic wand,” Senator Scott Wagner (R-York) said. “He’s king for a day.”
Wolf said pay raises for 450 employees will push about $1.6 million more on to agency budgets for the 2015-16 budget. He insists it’s well worth the cost.
“We should get higher productivity,” he said. “We should get better output and better morale, lower turnover, and lower training costs.”
But business groups disagree.
“The governor has no interest in wanting to support small businesses doing business with the commonwealth,” said Kevin Shivers, executive director of the National Federation of Independent Business.
Shivers worries about a provision in the executive order that requires private contractors that have contracts with the state to pay their workers $10.15 an hour. That will cost them an estimated $2.5 million beginning in the 2016-17 fiscal year. Shivers calls it a mixed message from the administration.
“How can you tell an employer, ‘we want you to sell us stuff at the lowest price, but at the same time we want you to have highest labor costs of anyone else in your industry?’ It just doesn’t make sense,” Shivers said.
Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, says some people will get raises, but he argues that artificially inflating the minimum wage has the unintended consequence of reducing jobs in the workforce.
“The more you make entry level jobs more expensive, the more people will try to find ways of using less of it,” Barr said. “It’s just simple economics.”
But the issue isn’t so simple. Democrats argue that employees earning $7.25 an hour live below the poverty line and ultimately end up receiving costly government assistance. That reliance on state and federal help could be reduced if their salaries were higher.
“We don’t want people poor,” Representative Madeleine Dean (D-Montgomery) said. “We don’t want families suffering and disproportionately women are affected by a low minimum wage.”
Wolf continues to urge the Legislature to increase the minimum wage for all Pennsylvanians, not just the relative handful that he could help with his executive order.