On February 7, 2017, Hearth and Home Technologies announced that it was closing its manufacturing facility in Colville, Washington. HHT President Vincent Paul Berger stated that the company was consolidating its Colville operations with its plant in Halifax, Pennsylvania in an effort to simplify and streamline the companies business model. The plant closure will cost about 100 local jobs. The plant in rural, Pennsylvania will gain gain at least 51 new jobs over the next three years.
But why would Hearth and Homes Technologies choose to leave one rural location for another? This question was largely ignored by the
Statesman Examiner's article covering the plant closure. One major reason why Hearth and Homes Technologies may have left Colville is to move to a more business friendly location. The state of Washington recently voted to increase its minimum wage. The minimum increased from $9.47 to $11.00 an hour as of January 1, 2017. Additionally, the minimum wage will will continue to increase to at least $13.50 in 2020. The federal minimum wage is $7.25 an hour.
So let's do the math. So let's say that you owned a company and you wanted to hire a new and inexperienced person to do an entry level job. In December, 2016 that person would have costed you $9.47 per hour or about $19, 700 per year. Now as of January 1, 2007, that same person is costing $22,800. This is an extra $3,100 per year. Further consider that in 2020, this same inexperienced and often unproven employee will about $28,000 a year. This is over an $8,300 per year for each new hire which amounts to a huge 42 percent wage increase.
Remember, the above numbers do not take into consideration all of the additional costs that an employer must pay such as workers compensation, social security contributions and a great many other things. It is an unfortunate fact that a lot people working at minimum wage are not worth $13.50 or even $11.00 or even $9.47 an hour. Just look around you, and you can easily verify this fact for yourself.
Pennsylvania Wins
When a government creates an unfriendly business environment, companies will move elsewhere. Pennsylvania has a minimum wage of $7.25 an hour which is the same as the federally mandated minimum wage. Pennsylvania's Governor Wolf said, “Pennsylvania has a long manufacturing history and HTT already knows the
advantages that our borders provide. I commend HHT on its continued
commitment to the commonwealth and anticipate its continued success into
the future.” Pennsylvania offers businesses tax breaks, loan interest loans and other incentives to encourage businesses to do business in the state an create more local jobs. Hearth and Home Technology's manufacturing consolidation will increase the workforce at its plant in Halifax by about 24 percent.
Colville Loses With The Living Wage Argument
Remember, Hearth and Home Technology was already paying more than the 2016 minimum wage at its Colville plant. But that was not enough for some people. Unfortunately, many people don't realize that no law can make an employee worth more money to an employer. These minimum wage increases always result in two things happening: Prices go up and people loose their jobs. I don't think that any of the liberal politicians and voters are loosing any sleep over the loss of over 100 jobs in Colville. Just ask any of these newly unemployed how that new living wage is working out for them. And you can count on a lot of other companies following HHT's example and moving to more business friendly places.
HHT President Vincent Paul Berger.
HHT President Vincent Paul Berger.
