PolicyBlog has moved!

Thank you for visiting, PolicyBlog has a new address.

Our new location is http://www.commonwealthfoundation.org/policyblog

Please adjust your bookmarks. Archived posts will remain here for now.


Wednesday, July 25, 2007

Wage hikes affect prices, teen jobs

Dan Miller of the Patriot News on the effect of the minimum wage increase on jobs, hours, and worker benefits.

The employers say they haven't cut jobs. Instead, they have reduced hours or aren't adding as many workers as they would like.

After the state law was passed a year ago, Josh Rissinger, general manager of 3 B Ice Cream, predicted that the mandated increase would lead to changes at his business, but he wasn't sure exactly how.

Recently, he said those changes have included higher prices and profits that have been cut in half. An ice cream cone costs 25 cents more this year than last. ...

Rissinger said cutting jobs isn't an option, because 3 B needs all its workers. Rissinger said he has five midstate stores, and no location has more than 10 workers, so 3 B won't be hit with the full wage hike until 2008.

Rissinger noted that he is more reluctant to hire a teenager with no experience. ...

Stew Rhodes, owner of Slack's Hoagie Shack in Lower Allen Twp., said he hasn't laid
off any of his 11 workers. But he has cut hours while increasing pay for longtime employees. ...

He increased prices 25 cents per item, too. And he's been hit with other cost increases -- the price of cheese is up 70 percent. But Rhodes said he could have avoided raising prices if not for the wage increase. ...

"I won't hire a 14- or 15-year-old any more if I have to pay them $7.15 an hour," Rhodes said. "I don't want to take a chance over this person being a good worker or being a dud."

Mike Pronio, general manager of Pronio's Market in Hershey, said he also has to be much more selective and cautious" in hiring people without experience. "It hurts the kids," he said.

Pronio hired a young person with disabilities through an agency. The employee did well, and the agency asked Pronio to hire more.

"I can't afford to do that," he said. "We're hurting the people who need it the most."

Mr. Miller should be forewarned that when I wrote a piece on the effects of the minimum wage increase, and noted that many of the effects we projected in our 2005 study had come to pass, I received a number of responses that I was just wrong. Most of these came from legislators who refused to believe that they hadn't "helped thousands of workers get out of poverty."

And when I pointed out that the data cited by Gov. Rendell showing that the unemployment rate dropped since he the minimum wage increase also shows a decline in total jobs and in the labor force, one legislator (who I won't name here), told me this was wrong, because he hadn't "bumped into [anyone hurt by the minimum wage increase] on the street."

No comments: