Earth to the Pa. Legislature: Raise the minimum wage | Opinion

As long as Pennsylvania’s minimum wage remains at $7.25 per-hour, it feeds the growth of inequality

Demonstrators participate in a protest outside of McDonald’s corporate headquarters on January 15, 2021 in Chicago, Illinois. The protest was part of a nationwide effort calling for minimum wage to be raised to $15-per-hour (Photo by Scott Olson/Getty Images).

By Claire Kovach and Stephen Herzenberg

Ho hum, another year, another increase in the gap between Pennsylvania’s minimum wage and the
minimum wage in our neighboring states.

As the map below shows, three states and the District of Columbia now have minimum wages between $5.25 and $7.75 per hour higher than Pennsylvania—between 72% higher and more than twice as much.

Could one reason that Pennsylvania businesses in counties neighboring New York, New Jersey, and Maryland have high quit rates and struggle to fill vacancies be that Pennsylvanians keep leaving the state to go get decent jobs?

States with higher minimum wage than Pennsylvania
(Keystone Research Center graphic)

Several years ago, when Gov. Tom Wolf first proposed a $12 per-hour minimum wage in Pennsylvania, there were some questions about whether the jump from $7.25 to $12 was too big. This year, Governor Wolf again proposed an increase to $12 immediately, followed by 50-cent-per-hour increases each year until reaching $15 per-hour in 2028. Today, an immediate increase to $12 per-hour is not too big. 

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First, we need that big of an increase to $12 per-hour to help Pennsylvania employers compete for workers with businesses in neighboring states.

Second, even with our paltry $7.25-per-hour minimum wage, wages have increased—nowhere near as much as in neighboring states but enough that the number of workers earning less than $12 per hour is small.

The newest annual, legislatively mandated Analysis of the Pennsylvania Minimum Wage report from Pennsylvania’s Minimum Wage Advisory Board estimates that there are only 640,000 Pennsylvanians earning less than $12 per-hour, about one in 10 Pennsylvania workers (Only 63,800 Pennsylvania workers earn $7.25 or less or about one in every 100 Pennsylvania workers.)  

While an increase to $12 per-hour would have a more modest impact than it would have had in 2018 or 2019—when wages at the low end were lower than today—it would still benefit one-and-a-half million Pennsylvania workers, 86 percent of them adults, more than three out of five of them women, and one in three with a child aged 18 or younger in the household.

And as we recently reported, there is overwhelming support (73 percent) for putting the minimum wage on a path to $15 per- hour with support at 61 percent or higher in every single Pennsylvania state House and Senate district.

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Here’s another reason we need a jump to $12 per-hour immediately followed by step increases to $15 per-hour and yearly cost of living increases (the latter supported by 77 percent of Pennsylvanians): so that people earn something closer to a “living wage”—one high enough to cover the cost of a bare-bones family budget.

The Massachusetts Institute of Technology’s Living Wage Calculator estimates a living wage in every Pennsylvania county. The calculator highlights that “The living wage model does not include…funds for pre-prepared meals or those eaten in restaurants. We do not add funds for entertainment, nor do we incorporate leisure time for unpaid vacations or holidays…[T]the calculated living wage does not…enable savings and investment or…the purchase of capital assets (e.g., provisions for retirement or home purchases). The living wage is the minimum income standard [required to get by without public assistance]…[T]he living wage is perhaps better defined as a minimum subsistence wage for persons living in the United States.” 

By MIT’s estimate, the current living wage in Pennsylvania for one adult with no children is $16.67. 

There are currently only eight Pennsylvania counties with a living wage under $15 per-hour.

As long as Pennsylvania’s minimum wage remains at $7.25 per-hour, it feeds the growth of inequality. A minimum wage boost is crucial for helping working individuals and families afford the basics. It is also critical to enabling Pennsylvania families to buy more at local businesses and drive the economy forward. It’s time for Pennsylvania’s lawmakers to follow the lead of legislators in neighboring states and raise the minimum wage.

Claire Kovach is senior research analyst and Stephen Herzenberg an economist and executive director at the Keystone Research Center, a progressive think-tank in Harrisburg.

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Capital-Star Guest Contributor
Capital-Star Guest Contributor

The Pennsylvania Capital-Star welcomes opinion pieces from writers who share our goal of widening the conversation on how politics and public policy affects the day-to-day lives of people across the commonwealth.