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WILKES-BARRE — A recent report suggests Pennsylvania could be one of 19 states to see a rise in the minimum wage by the end of 2018.
The report released by the Keystone Research Center in Harrisburg states that workers in Pennsylvania lost ground relative to those in neighboring states where minimum wages are higher and employment growth in low-wage sectors like food services has been stronger.
The report finds that the minimum wage in six border states — Delaware, Maryland, Ohio, New Jersey, New York, and West Virginia plus the District of Columbia — increased on average by 26 percent between December 2013 and this January.
The report shows that wage and employment growth for very low-wage workers and those employed in food services has also been stronger in the region than in Pennsylvania, where the minimum pay stands at $7.25 hourly.
“Public support in Pennsylvania for a higher minimum wage has always been strong because most people intuitively understand that what ultimately drives the economy comes down to what’s in their paychecks,” said report author and KRC labor economist Mark Price, Ph.D. “The data we review here make it very clear that the failure to raise the minimum wage in Pennsylvania has not benefited the economy or wage growth relative to neighboring states.”
State Sen. John Yudichak, D-Plymouth Township, said it’s been a decade since Pennsylvania passed a minimum wage increase.
“And it has become imperative that the General Assembly pass Senate Bill 12 that would deliver fair wages for working families and make Pennsylvania’s workforce competitive with all of our neighboring Mid-Atlantic states that have raised their minimum wage in recent years,” Yudichak said.
J.J. Abbott, press secretary for Gov. Tom Wolf, said the governor has consistently supported raising the minimum wage, including the increase included in his budget proposal last year.
“Which the Republican-controlled General Assembly did not support,” Abbott said. “Gov. Wolf believes hard-working Pennsylvanians are long-overdue for a raise.”
Findings
Some of the report’s key findings:
• The Pennsylvania minimum wage this January at $7.25 stands 13.8 percent below the minimum wage in Delaware (where the minimum wage is $8.25); 14.5 percent below the minimum in Ohio ($8.30); 18.6 percent below New Jersey’s minimum ($8.60); 20.7 percent below West Virginia ($8.75); 27.6 percent less than Maryland ($9.25); 43.4 percent below most of New York state ($10.40, but the minimum in New York City, Long Island and Westchester ranges from $11 to $13); and 72.4 percent below the District of Columbia ($12.50).
• Examining county level data on employment and average weekly wages drawn from a survey of employers in food services and drinking places, a sector with a large share of low-wage workers, the report observes more growth in wages and employment especially in New York, northern West Virginia, and Maryland than in Pennsylvania.
• Overall in Pennsylvania, real wages in food services grew by just 5 percent, while on average across the region (Delaware, District of Columbia, Maryland, New Jersey, New York, Ohio, and West Virginia) they grew 7.8 percent between 2012 and 2016. Wage growth in food services has been particularly low in many rural areas of Pennsylvania.
• Not only has wage growth been stronger in the rest of the region where the minimum wage has increased, but so has employment growth. As the purchasing power (after accounting for inflation) of the minimum wage rose 12 percent across the region, Pennsylvania’s minimum wage lost 4.7 percent of its purchasing power from 2012 to 2016.
• With the minimum wage now fixed at the federal minimum of $7.25, the lowest earners today in the state earn just under a third (31.9 percent) of what the typical Pennsylvania worker earns.
Solutions
The report makes these recommendations:
• Raise the minimum wage this coming July from $7.25 to $9 (a 24 percent increase), followed by a $1 increase each July until the minimum reaches $15 in 2024.
• Eliminate sub-minimum wages like the tipped minimum wage, which is currently set at $2.83.
• Local governments in Pennsylvania should be given the power to establish higher minimum wages to account for higher wages and the cost of living.
• Once the minimum wage reaches $15, it is critical to adjust the minimum wage annually so that its purchasing power remains constant relative to the median wage for full-time, full-year workers in Pennsylvania.
