Tuesday, July 12, 2005

Pay raises for legislature hooked to raising the minimum wage - reactions from Ls

Libertarian Party of Pennsylvania
3863 Union Deposit Road #223
Harrisburg, PA 17109

For Immediate Release:
Date: 07/12/2005

For more information contact:
Doug Leard at 215-646-1502 or
David Jahn (Chair) at 610-461-7755

Governor Rendell recently told reporters that he would demand a minimum-wage increase from lawmakers in exchange for endorsing a legislative pay raise. Rendell favors boosting Pennsylvania's minimum wage to $7.15 an hour.

Our legislators are already among the highest paid in the country and their performance does not warrant a pay raise. Rendell compounds the damage to Pennsylvanians by using the pay raise as a hammer to pound through a minimum wage increase that will hurt Pennsylvania’s economy and poor.

How does a minimum wage increase damage our economy and hurt the poor?

First, minimum wage increases destroy jobs. Unless a business creates additional revenue to cover the enlarged salary expenses, the business must spread their work among fewer workers. Companies are thus pushed to inhibit hiring and potentially eliminate existing jobs. Teenagers and others seeking initial job experience that will allow them a first step onto the economic ladder are usually the ones impacted.

A study in 2004 by Duke University supports this claim. The study found that increases in the minimum wage decrease job prospects and increase the number of unemployed minimum wage workers.

Second, minimum wages limit businesses and workers economic freedom. As Doug Leard, Media Relations Director of the Libertarian Party explained, “when I first started working, I was willing to work below minimum wage to get established in my field of interest. Once in, I was confident I could work my way up the ladder. Increasing the minimum wage makes it harder to get that first step onto the success ladder.” This sentiment is supported by a study of economists at Florida State University and Miami University of Ohio that found that full-time workers hired at the minimum wage received a median pay increase of 13 percent within their first year.

A minimum wage increase hurts the poor by destroying jobs and providing workers with less employment options. Rendell’s proposal is bad for Pennsylvania!

The Libertarian Party is the third largest political party in the United States with over 600 officials serving in office throughout the nation. Please visit www.LP.org or www.LPPA.org for more information on the Libertarian Party.

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