IFO: Wolf’s wage increase would raise some revenue, lose some jobs

(Harrisburg) — One of the more contentious parts of Governor Tom Wolf’s budget proposal is a bid to raise Pennsylvania’s minimum wage to $12 an hour.

It’s currently $7.25–the lowest the federal government allows.

Republicans have repeatedly rebuffed Wolf’s attempts to change it. And now, the Independent Fiscal Office’s latest report on the implications of Wolf’s plan has given them some ammunition.

The governor has said a wage increase would boost the economy, and net $100 million a year in new revenue.

The IFO’s report shows the number probably wouldn’t be that high. Director Matthew Knittel said $40 million in new revenue is a more likely estimate.

But he notes, that’s not actually a huge discrepancy when compared with the commonwealth’s $3 billion deficit.

“In a bigger picture, the $60 million difference–when we’re talking about size of the projected deficit–is rather small,” he said.

The report also says the higher wage would lose the commonwealth about 54,000 jobs. That’s about four percent of the total number of positions that would be affected by the hike.

Knittel noted, that number sounds more extreme than it actually is–and it wouldn’t happen all at once.

“You might have staff who retire, and then those positions wouldn’t be filled,” he said. “You might have some unfilled positions that you would eliminate. You may have created some jobs in the future, and due to a higher rate a firm may not do that.”

A spokesman for the governor pushed back against the IFO’s findings, saying that “every state surrounding Pennsylvania has raised their minimum wage and there is no evidence that those increases led to a loss of employment.”

The nearly five-dollar hike Wolf’s proposing would boost Pennsylvania’s minimum wage from the lowest in the northeast, to the highest.