2014-01-23 / Local & State

In Berks, Elsewhere, Debate Rages On Minimum Wage

By Matthew Nojiri


READING, Pa. (AP) – Gary Intelisano has a vision for his business on Carsonia Avenue.

Intelisano took over ownership of Intel’s Pennside Drive-In in July, and he has made some big changes, staying open 7 days a week, year round.

He said the drive-in is known for its ice cream, but he sees opportunities to grow its food and sandwich business.

As Intelisano makes his plans, he worries about one big spike in costs: a possible raise in the minimum wage.

“It would definitely put a hurting on us,’’ he said. “It would probably mean raising food prices, maybe laying off some help and would affect our workers’ compensation costs.’’

In Pennsylvania, nearly 200,000 people earn the minimum wage or less, but an increase could affect hundreds of thousands more who earn just above the minimum and the businesses that employ them. With several key elections looming in the fall, proposals have been gaining attention to raise the minimum wage to as high as $10.10.

Pennsylvania’s minimum wage is set at the federal level of $7.25. Some of the Keystone State’s neighbors have just raised their minimum wages.

Ohio, New York and New Jersey are among 13 states that raised their minimum wages on Jan. 1. California will follow suit on July 1.

Intelisano said raising the minimum wage would have direct consequences for him, since he has two employees working at the minimum wage and another 10 who are close enough to it that they would get raises.

It’s unclear if a higher minimum wage is coming to Pennsylvania any time soon.

Two bills in the state Legislature would raise the minimum wage to $9 an hour. One, sponsored by state Rep. Patty Kim, a Dauphin County Democrat, would call for another increase to $10.10 after a year. The other bill, from state Rep. Mark Cohen, a Philadelphia Democrat, would raise the minimum wage to $11.50 after two years.

In December, Gov. Tom Corbett said he was reluctant to support an increase, citing a slowly improving economy .

U.S. Sen. Bob Casey came to Reading in September to discuss the Fair Minimum Wage Act, a bill introduced earlier this year that he cosponsored. The bill would raise the minimum wage to $10.10 in even increments over three years and would include inflation-based increases each year afterward.

“This gets at the people who are working but struggling,’’ the Scranton Democrat said during his Reading visit.

Those arguing for raising the minimum wage say it has not kept up with inflation and does not allow families to survive.

If the minimum wage kept pace with its 1968 value, it would be $9.40 today, said Mark Price, labor economist for the Keystone Research Center. He said a higher minimum wage could hurt some struggling small employers, but he said adapting to rising costs is part of owning a business.

“It’s not good policy to have a low minimum wage that puts a number of people living at or below the poverty line,’’ he said. “There is a built-in innovation in labor markets. If you raise the cost of labor, employers have to get smarter about using the cost of labor.’’

The Berks Community Action Program works to help move people from public assistance to employment through the Work Ready program.

“What we want to do is ensure the jobs we do have provide a livable wage,’’ said Lawrence A. Berringer, executive director of Berks Community Action Program on Washington Street. “That will allow the people that are in poverty to rise above that.’’

The current minimum wage is not high enough, especially for single parents, Berringer said. Sixteen percent of minimum wage earners in 2012 were single parminimum ents, double the number from 2011, according to state labor statistics.

A higher minimum wage could lead to fewer people relying on public assistance, said Mandy Heffner, deputy director of the Work Ready program.

“To get a job at $7.25 an hour is not enough to eliminate the need for food stamps or cash assistance,’’ she said.

For business owners like Intelisano, there are big worries a minimum wage increase would curtail growth and force layoffs.

“When you look at the employers that pay the minimum wage, usually they are small businesses and many businesses in the food industry,’’ said Alex Halper, director of government affairs for the Pennsylvania Chamber of Business and Industry. “Those are both categories that often times have very small profit margins.’’

Halper cited state statistics showing 77 percent of minimum wage earners in 2012 were childless, and 56 percent were under 24.

“We’re talking about the vast majority do not have children,’’ Halper said. “The narrative from proponents that this is a very needy population doesn’t match the reality of the demographics we see are earning the minimum wage.’’

He said the chamber supports other income-tax credit programs that help low-income earners without hurting small businesses.

The minimum wage is not enough to support a family, said Ellen T. Horan, president and CEO, Greater Reading Chamber of Commerce & Industry. But Horan said those looking for higher paying jobs need to look to training, as minimum wage jobs will likely never pay enough.

“The best opportunity to increase your economic status is to increase your skill set to be able to qualify for non-minimum wage jobs,’’ Horan said. “Minimum wage jobs are meant to be the basic building block of earning a work history. They are not going to be family-sustaining jobs. I hate for people to think they just need to raise the wage, and I’ll be in good shape.’’

Kaleena Sculco of Reading knows the struggle of working for $7.25 an hour. In 2010, she worked two minimum wage jobs to support her two children, Isabella, 3, and Catherine, 9. She currently earns more as a receptionist with the Berks Community Action Program, and she said the extra money has helped.

Crystal Latimer, 29, of Reading, is looking for a job. She has been in the Work Ready program for six months and is hoping to land administrative work in an office that will be enough to provide for her two children, Shayleen, 7, and Dalant-e, who turns 2 in April.

But $7.25 an hour will not be enough.

“I do have a college degree,’’ Latimer said. “The minimum wage, what is that going to do for me? It’s not going to help me. I want to be able support myself and my family.’’

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