By E. Fletcher McClellan
Last week, state lawmakers confronted Gov. Tom Wolf’s administration over its proposal to raise the state minimum wage from the federal minimum of $7.25 an hour to $12 an hour by July, by increments, to $15 an hour in 2025.
Nearly 30 states, including all of Pennsylvania’s neighbors, have higher minimum wages than the federal standard. Twenty-one states, including solidly red Arkansas and South Dakota, will increase their minimum wages this year.
The question is whether Pennsylvania will join what is clearly a national movement.
Judging from recent remarks from Wolf and legislative leaders, as well as the testimony presented at budget hearings, the prognosis is uncertain.
Republicans were harshly critical of Wolf’s proposal. However, Senate Majority Leader Jake Corman, R-Centre, and House Appropriations Committee Chairman Stan Saylor, R-York, said that though $12 an hour was too high, they were open to negotiating smaller minimum wage increases.
The need for a minimum wage hike is clear.
Since it is not keyed to inflation, the value of the federal minimum wage has dropped to $6.19 an hour since 2009, when the current level was last set. The annual income of a full-time worker paid the federal minimum wage in 2016 was $15,080, less than the official poverty threshold.
These are the working poor, not the grifters or takers that the mean-spirited like to condemn. About half are young, though fewer than 25 percent are teenagers. Most are white and most are women, many with dependent children. Food service workers are by far the largest occupational group earning minimum wage, followed by sales persons and personal care providers.
That said, reasonable people can disagree over how much the minimum wage should increase. At last week’s budget hearing, Republicans cited a 2018 study by the Independent Fiscal Office that claimed a $12 minimum wage would result in 33,000 lost jobs.
At the same time, we also know that there are dislocations in the labor market that give employers the upper hand. Rural areas where jobs are scarce, a large supply of immigrant workers, occupations in which unions have little presence – all are conditions that lead to substandard wages.
For every analysis that connects higher minimum wages to unemployment, others show little or no overall job impact.
In a famous study that examined a labor market shared by higher wage New Jerseyans and lower wage Pennsylvanians, job losses attributed to the higher minimum wage were offset by increased worker productivity and less job turnover.
The focus on the minimum wage’s effect on jobs, while important, overshadows the many positive effects of raising wages for low-income workers.
The same IFO study that calculated net job losses from increasing the minimum wage also stated that the net wage gain for the hundreds of thousands of workers directly affected would be $3 billion annually, representing a significant increase in purchasing power.
The social effects of minimum wage raises also tend to be ignored. As Wolf administration officials testified, low-income workers that receive a wage increase will be less likely to need public assistance.
Studies of minimum wage hikes from the University of California-Berkeley cite improved health results for workers and their children, as well as increases in children’s school achievement and cognitive and behavioral outcomes.
One encouraging sign from last week’s hearing was that both Democrats and Republicans agreed on the need for workforce development initiatives that close the skills gap preventing workers from obtaining higher wage jobs.
Rather than portraying the choice facing lawmakers as either-or, however, it would seem that action on both workforce development and the minimum wage is required. There is little evidence that a higher minimum wage discourages workers from seeking to advance their employment prospects.
Political incentives may favor a deal on the minimum wage. A 2017 Franklin & Marshall College poll showed that over 60 percent of Pennsylvanians favored an increase to $12 an hour.
The spirit of bipartisanship last year in Harrisburg, in which no general tax increases occurred and compromises were struck on the education budget and other issues, may continue in 2019 if the economy continues to grow.
On the other hand, we will certainly see more partisanship and ideological posturing as the 2020 election approaches. In particular, many Democratic presidential candidates have signed on to the Fight for $15 campaign.
The prospect of a nationalized election, and the uncertainty that it brings, should induce more cooperation among Pennsylvania politicians this year.
For those seeking to increase the minimum wage, the time is now.
Capital-Star Opinion contributor E. Fletcher McClellan is a political science professor at Elizabethtown College. His work appears frequently.