Drastically increasing Pennsylvania’s state minimum wage could lead to significant job losses, income reductions, and small businesses closures, according to a recent report commissioned by NFIB, an organization advocating on behalf of small and independent businesses.
The study, “Economic Impacts of a Proposed Minimum Wage Increase in Pennsylvania,” June 2023, examines the one-vote majority in the state House that plans to more than double the minimum wage rate to $15 an hour.
In June, House Bill 1500 was referred to the Committee on Labor and Industry before being passed out of the full House. It would raise the minimum wage by 2026 from $7.25 an hour to $15.00 an hour. The bill also would allow for automatic future, annual minimum wage hikes tied to inflation data the Pennsylvania Secretary of Labor and Industry reports.
If the bill becomes law, there would be an economic output loss by 2033 exceeding $13 billion, nearly $7 billion from small businesses, and more than 101,000 jobs would be lost, 56 percent from small businesses, according to the report.
Many small businesses will not be able to afford these higher wages and payroll taxes, the report said.
NFIB believes that instead of raising minimum wage, the state should provide financial relief to small, independent businesses.