Minimum Wage Legislation

The Board of Directors of The Lancaster Chamber of Commerce & Industry remains adamantly opposed to any and all government efforts to influence the private sector’s ability to determine compensation and benefits for members of the labor force. Accordingly, the Board strongly opposes passage of any legislation increasing the minimum wage on either the state or federal level.

The debate over the merits of increasing the minimum wage has been ongoing since its inception in the late 1930s. Each time a measure has been introduced to increase the rate, business groups around the nation, including The Lancaster Chamber, have fought its passage because of its adverse effects on the groups it is intended to help. As a general rule, the minimum wage applies to low-skilled or unskilled workers who are most vulnerable to shifts in the business cycle. But a more specific rule also applies – “the ripple effect.” When a minimum is raised all the other levels automatically need to be adjusted. This creates a significant increase in labor costs which, in turn, has the unfortunate consequences of: (1) further diminishing the U.S. competitiveness in the international market, and (2) reducing the workforce, particularly the low and unskilled workers the original legislation was intended to help. Statistics indicate the minimum wage increase enacted in the late 1970s eliminated approximately 650,000 jobs in that sector.

In addition, the legislation currently pending in both the federal and state legislative bodies includes not only increases in the current minimum wage over the next three years, but also provisions which would index the minimum wage on an annual basis. Thus the current proposals would carry the negative effects of a government-mandated minimum wage to future generations.

The Board of Directors of The Lancaster Chamber of Commerce & Industry believes this proposal to be harmful to all sectors of the business community, workforce and society. The Chamber, therefore, will work diligently to defeat any effort either to increase the minimum wage or to index additional future increases.

Approved July 1987.

<< Back to Position Statements