Op-Ed: Small Businesses Face Big Predicament With $15 Minimum wage

Gov. Tom Wolf wants to increase Pennsylvania’s minimum wage to $12 an hour in July and up to $15 over a few years.

While big box stores and other large corporations may be able to afford such a significant increase in labor costs, it could be devastating to many of the state’s small businesses.

Unfortunately, the increase is likely to hurt many of the employees it is intended to help. Small businesses are sharing their stories to explain the predicament they would face if labor costs rose that much.

The owner of a child care center in Luzerne County has owned her business for 30 years. If the minimum wage is increased, she says she will have to raise weekly fees, which will hurt struggling families. It’s hard enough for parents who both work to support their family.

The owner says this increase would cause such hardship that she believes it could put her out of business. And if that happens, 15 full-time and two part-time employees will lose their jobs.

To the west of Pennsylvania, in Clearfield county, an employee-owned distributor of school supplies employs hundreds of seasonal employees – mostly teens, 16 to 18, who are on summer break.

If the proposed increase becomes law, the small businesses’ workforce must be reduced by 40 percent to maintain positive cash flow.

That will make it impossible to satisfy customers, and it comes at a time when the firm can’t raise prices and still compete with large national firms that aren’t likely to be impacted.

In southcentral Pennsylvania, a Perry County store owner says he too would have cut jobs, sending a third of his employees to the unemployment line. He only has a 1.5 percent profit margin, and it can’t cover the increased labor costs.

The store has been around for 100 years, built on a sense of community and great customer service. He adds that both will disappear if the minimum wage proposal passes, and so will his business.

He invites politicians pushing the legislation to visit his store and pick the employees who will be getting a pink slip.

This proposal will affect daycares, seasonal employers, small retailers, restaurants and many other small businesses in Pennsylvania.

It will have the biggest impact on those who desperately need that first job to gain experience and skills or people needing to reenter the workforce. Those are the jobs that will disappear.

Lawmakers must seriously consider the consequences and listen to the economic realities that small businesses across our state would face.

Gordon Denlinger is state director of NFIB in Pennsylvania, which advocates on behalf of 12,500 small business members in the state.

 

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