Governor wants state to move to $12 an hour, but some believe that's too much.
At 7:25 a.m. Wednesday, in the chilly semi-darkness, Jasmine Flores left her apartment on East Ninth Street and started walking.
The day was off to a rough start for the 25-year-old home health aide.
The four-block walk only took a few minutes. But the bus was late. It wouldn't appear for 25 minutes and it would be another 40 minutes before she arrived at work to meet with her client in Millcreek Township.
An Erie native, Flores said she loves her clients and likes her work.
But Flores, who has $15,000 in student debt, wishes she could get more than 20 or 25 hours a week. And she thinks she's worth more than $10 an hour.
A proposal by Gov. Tom Wolf to raise the state minimum wage from $7.25 to $12 won't change her financial situation dramatically, said Flores, who, along with her roommate, recently received a shutoff notice from National Fuel Gas.
It won't mean buying a car anytime soon. And it certainly won't mean buying a house, said Flores, who recently submitted petitions to run for Erie City Council — partly in the hopes of winning the $6,000 income and partly, she said, in hopes of changing a system she sees as broken.
But Flores, who receives $156 a month in government food benefits and considers a trip to Taco Bell with friends a special treat, said a couple of dollars an hour more might make things a little easier.
"I don't feel like there is a set value for what a caregiver does," she said. "I feel like we should have a livable wage. I feel like we should be able to go home and pay our bills and maybe have a little extra at the end of the day."
Like a growing share of Erie residents, Flores makes more than the minimum wage, which has held steady in Pennsylvania since 2009 when the federal minimum wage was raised to $7.25.
At last count, 29 states and Washington, D.C., have either raised or passed legislation to raise the minimum wage above the federal standard.
"There are very few people making minimum wage anymore," Mike Kovski, staffing manager for Career Concepts, said in a recent interview.
Even Waldameer Park & Water World, which is exempt from the law as a seasonal business, pays the vast majority of its 600 or so summer employees significantly more.
The competitive nature of the business demands it, said Steve Gorman, president and general manager.
While the evidence suggests that the average starting wage for many entry-level jobs is closer to $9 an hour, there's a robust debate that Wolf goes too far with his proposal to raise the state minimum wage to $12 an hour.
Gorman, for one, has been preparing for a hike in the minimum wage for years but said he's taken aback by the 65 percent increase the governor is proposing.
"I have always felt it wouldn't be such a shock to business," Gorman said. "It should be more gradual. It should be tied to inflation."
He said he's hopeful that the state Legislature will temper Wolf's proposal with a more moderate compromise.
A letter, signed by 38 economists on the faculty of Pennsylvania colleges and universities, argues that the Keystone State should take a slightly more dramatic step, raising the minimum wage to $15 by 2015.
Their letter says, in part: "We can afford to pay the lowest-paid workers in Pennsylvania substantially more than their counterparts a half-century ago. Workers today produce more from each hour of work."
There are arguments to be made for a dramatic boost to the minimum wage in Pennsylvania. It cannot be argued, however, that a 65 percent increase is needed simply to keep pace with inflation.
Online inflation calculators show the cumulative rate of inflation since 2009 — the date of the last increase — has been about 17.8 percent. Based on that calculation, simply to keep pace, the unemployment rate would need to be raised to $8.54 an hour.
Ken Louie, professor of economics at Penn State Behrend and director of the Economic Research Institute at Behrend, said a study published in September in the American Economic Review examined the effect of minimum-wage increases in three West Coast cities.
One of the findings was that raising the minimum wage had a negative impact on employment over the long term, Louie said. Los Angeles, for instance, experienced an employment decline of 3 percentage points, while employment declined 2 percentage points in Seattle, he said.
Another study, this one by the U.S. Census Bureau, shows that increases in the minimum wage tend to produce increases in earnings growth that persist over time.
Paul Nelson, who owns Waldameer, is proud of the wages he has paid to thousands of summer employees, despite the park's exemption as a seasonal employer. High school graduates 17 and over make $9 an hour, plus a 25-cent-an-hour bonus for staying the whole season. Employees who are 16 and 17 earn $8.50 and a 15-cent bonus for staying the whole year. Younger employees of 14 and 15, who do what Nelson calls "gopher work" earn $6.75 with the potential for a 15-cent bonus.
Both Gorman and Nelson say they worry about the effect a significantly higher minimum wage would have on Waldameer and business in general.
At the park, Gorman said, it might mean fewer hours for some employees and closing down some games or rides on slow days.
Nelson, whose park has been investing in new rides each year, worries a dramatic hike could lead to bigger problems.
He talks about friends who own an amusement park in New York State, where the minimum wage has been raised to $11.10 an hour. His friends have stopped buying new rides.
That worries Nelson.
"If you don't grow, you end up dying," he said.
For every person like Nelson who worries about what a substantially higher minimum wage might do to the economy, there is another who sees it as a fighting chance for the working class who have been victims of stagnant wages.
A question about Wolf's proposal to raise the minimum wage early last week on the GoErie Facebook page brought heated debate and more than 150 comments.
One commenter observed: "When minimum wage goes up so does everything else. Now the guy making $13 an hour breaking his back will need $20 an hour to do the same work or he will just go be a greeter for minimum wage and the guy getting $20 will need more and on and on."
It's an observation that seems to make sense, but the evidence doesn't support it, Louie said.
In most cases, he said, the benefits of a higher minimum wage are limited to those who make less than the new minimum wage.
"If there is some wage inflation, perhaps at the higher end of pay scale there may be some demand for higher pay," Louie said. "But it's not clear-cut that it's going to cause wage inflation. Some analysts say inflation would only be minimal."
Greg Goss, the owner of the Chimney Clinic, a chimney sweep service in Erie, thinks there's a simple and inevitable cause-and-effect relationship.
"I am going to raise my prices just as everyone else will," he said. "So in the end, all it does (is) drive the cost of everything up."
Flores understands all that.
But she also understands that she's been at her job nearly a year, hasn't had a raise and doesn't see the prospect for getting one. She's working six days a week, but only 20 or 25 hours a week. Requests for more hours have led nowhere.
It's possible, she said, that raising the minimum wage will drive up prices and prompt higher-paid workers to ask for more money.
And that's OK with her."I feel as though income should go up as our cost of living goes up," she said. "If the person who is making $15 an hour feels like they deserve a raise, they probably do." So far, she said, asking for more money hasn't helped.
"They said they were working on it," she said. "How many companies are working on it? But it's just not happening."
Jim Martin can be reached at 870-1668 or by email. Follow him on Twitter at www.twitter.com/ETNMartin.