Can ‘Jobs That Pay’ create jobs that grow?

As we near the end of the fiscal year, two economic development components appear to have the most potential to be impacted by a new Pennsylvania state budget: An increase to minimum wage and the creation of job training programs, both of which Gov. Tom Wolf has focused on with his Jobs That Pay initiative.

The Jobs That Pay pledge is, in general, the governor’s frame for how he approaches the economy, said the governor’s press secretary J.J. Abbott.

“From the governor’s perspective, the value of job training programs, job and technology education … are obviously incredibly important for graduates and workers to get jobs to support their families,” he said. “But in reality, a lot of families are working full time and teetering on the poverty line.”

When asked if raising the minimum wage would benefit the individual employee at the expense of the small business, Abbott referred to what he called “the opposite end of that.”

“When [the governor] proposed the minimum wage, the Department of Revenue looked at the impact of that,” said Abbott.

Abbott said the Department of Revenue referenced more vying power for consumers and more disposable income in communities to buy products and services from small businesses. He also said this was proven true from a study conducted in Seattle, Wash., which showed not noticeable job losses but more money to spend.

“So,” he added, “positive impacts for small businesses.”

Shaun Donovan, economic development specialist for the Capital Region Economic Development Corporation (CREDC) in Harrisburg, said there is some confusion as to what Wolf has meant with his Jobs That Pay initiative but overall it is a good thing.

“At least it’s getting the conversation started,” said Donovan.

The problem Donovan sees is the desire for jobs that pay a living wage — about $12 an hour —  in exchange for no skill set.

“That’s not realistic,” he said. But he acknowledges that $8 an hour is also not a job that pays.

He said manual labor jobs, for example, don’t exist like they used to, which allowed people to get away with lower wages. Growing sectors, like technology, require a little bit more of a skill set.

For minimum pay, you expect minimum skill.

So, what is the solution?

Donovan’s thought: Access to education. This highlights a top concern Wolf has been trying to address with the creation of apprenticeship and job training programs.

“The poverty line is being defined by having a high school diploma,” he said. “What’s the problem we’re trying to solve? Poverty or quality of life?”

He said there is a challenge in some communities with varying levels of how people are willing to apply themselves. That then flows into pushback from employers as well.

“Only 4 percent of jobs pay minimum wage,” said Donovan. “For minimum pay, you expect minimum skill.”

Donovan said employers are willing to work with employees, though. For example, successions may be made, but perhaps the candidate can only be employed for four months without being enrolled in a basic education program. The potential workforce could then move from diploma to apprenticeship.

“Typically manufacturing and construction may be good places to start, but let’s get into healthcare. The top 10 jobs that have the most openings are in healthcare in middle to top [level] openings,” said Donovan. “Job apprenticeships could potentially help. Take semi-skilled workers and move them up the chain a little bit. CNAs to RNs, for example. Definitively paint a pathway.”

He explained that minimum wage jobs are not positioned to be permanent in our economy as much as it can be helped.

“Those jobs shouldn’t be the end of your line,” said Donovan.

This story is part of Grow PA, a reported series on economic development across 10 Pennsylvania counties underwritten by the Chamber of Commerce for Greater Philadelphia. Sign up for our weekly curated email here.