Wolf’s Wage Hike: Big Promises, Bigger Fallout

Governor Unilaterally Raises Minimum Wage for State Workers, But at What Cost?

March 7, 2016, HARRISBURG, Pa.—Today, Gov. Wolf will sign an executive order increasing the minimum wage for state workers and contractors from $7.25 per hour to $10.15 per hour. He is also expected to call on the Legislature to up the minimum wage mandate to $10.15 for all Pennsylvania workers.

While mandated minimum wage increases come with big promises, they carry bigger—and far less glowing—consequences.

“Governor Wolf is promising a bag of goodies, but at what cost to taxpayers?” commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. “Pennsylvania already spends nearly $100,000 per state worker in wages and benefits. Wolf’s unilateral wage hike will only add to this already astonishing burden on state taxpayers.

“Meanwhile, in the private sector, higher employee costs mean fewer jobs. Pennsylvania would lose 31,000 jobs with a statewide minimum wage increases to $10.10, according to an analysis by the Independent Fiscal Office. To put that in perspective, the state created just 38,000 jobs in all of 2015.”

Pennsylvanians remain in the dark on the cost of Wolf’s executive order as well as the number of workers affected. Unfortunately, such unilateral actions have become a hallmark of Wolf’s administration.  From his irrational vetoes of corrections funding to his attempt to eliminate the Public Employee Retirement Commission to his illegal firing of the head of the Office of Open Records, Wolf has consistently taken a “my way or the highway” approach to governing that skirts the legislative process.

“Wolf’s latest action is little more than a political stunt to distract from his unpopular fixation on tax hikes,” Benefield continued. “Now is the time to rein in the costs of government, not expand them. Gov. Wolf has been unwilling to agree to a budget and unable to get support for his tax-hike proposals, but now he is adding even more costs to taxpayers’ already high burden—circumventing the state Legislature to do so.”

In response to Wolf’s repeated overreach of executive power, the state House last year passed HB 826, sponsored by Rep. Mauree Gingrich (R—Lebanon County). The bill, which awaits Senate action, would require the IFO to calculate the costs of executive orders such as Wolf’s latest.

Nathan Benefield and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 to schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.