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).
Philadelphia and Pittsburgh are among the American cities where the buying power of the minimum wage has decreased because of rising prices and inflation, according to a new report.
Despite repeated legislative pushes to raise it, Pennsylvania’s statutory minimum wage of $7.25 an hour remains tied to the federal minimum wage, which hasn’t been raised since 2009. Meanwhile, five of Pennsylvania’s neighboring states — Delaware, Maryland, New Jersey, New York, and Ohio all were set to raise their minimum wages this year.
Analysts at the financial literacy site SmartAsset ranked 79 of the largest U.S. cities according to how much the minimum wage is worth after adjusting for the cost of living in each one.
Some American cities, it’s important to note, have set their own minimum wages, but buying power there is subject to the same economic forces as in other locales, according to the analysis.
Below, a look at the cities were the minimum wage goes the furthest and where it does not, and how Pennsylvania’s largest cities fared.
With a cost of living that's 8.4% higher than the national average, the minimum wage in Philadelphia is worth $6.69 an hour after adjusting for the city's cost of living, according to the SmartAsset analysis.
In Pittsburgh, where the cost of living is lower, the minimum wage is worth a nominally lower $7.20 an hour, according to the SmartAsset analysis.
As was the case with his predecessor, Democrat Tom Wolf, Pennsylvania's new Democratic Gov. Josh Shapiro has called for raising the state's minimum wage to "at least $15 an hour — period.
"Then we need to make sure that we’re giving people the skills necessary to do the jobs of today and tomorrow," Shapiro said during last fall's gubernatorial campaign against Republican Doug Mastriano.
The narrow partisan gap in the state House means the odds of passage for a wage hike bill could be more favorable. But any bill is likely to come to a halt in the Republican-controlled state Senate.
Some other highlights from the SmartAsset analysis:
- "The minimum wage goes furthest in Denver. After a January 2023 increase, the Colorado capital now has a minimum wage of $17.29 per hour, which ranks second-highest study-wide. However, residents in this city are getting the biggest bang for their buck. The city takes the No. 1 spot for the highest minimum real minimum wage, despite experiencing the 22nd-highest cost of living.
- "Minimum wage workers in Seattle earn the most. No city in our study has a higher statutory minimum wage than Seattle, where minimum wage workers earn $18.69 an hour. But Seattle is also among the highest cost-of-living cities in our study. After adjusting for those costs, Seattle’s real minimum wage shrinks to $12.51.
- "Less than a quarter of cities have a $15 minimum wage. Only 18 out of the 79 cities in our study have a statutory minimum wage of $15 or more. Meanwhile, 30 cities have a minimum wage that defaults to the federal minimum of $7.25, including four of the cities at the bottom of our rankings," and
- The "cost of living in Orlando closely tracks the national average. While Orlando is best known as the home of Walt Disney World, the cost of living in the city is just 0.2% above the national average. As a result, the city’s $11 minimum wage is worth $10.98 after adjusting for cost of living," according to the analysis.
To reach their conclusions, SmartAsset's analysts "used the minimum wage as of Jan. 1, 2023. In cases where cities differentiate between small and large employer minimum wage rates, we considered the minimum wage rate required for large employers.
"Additionally, for cities and states that distinguish between jobs offering health benefits and those that do not, we used the minimum wage for jobs that do not offer qualifying health benefits," they concluded.
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