Raising the state’s minimum wage to $15 would lift the income of more than 2 million Pennsylvanians; generate significant savings in the state’s Medical Assistance program and new tax revenues to help close the state’s looming budget deficit; and spur spending in communities across the state. In total, wages in Pennsylvania would increase by $9.1 billion.
Raising our minimum wage is also long overdue: The state’s $7.25 minimum wage has remained flat for the last decade. Pennsylvania is now just one of just 20 states that continues to rely on the federal minimum wage.
In January 2019, more than 5 million workers in 20 states and in 24 cities and counties around the nation will earn a higher minimum wage. All of our neighboring states Ohio, West Virginia, Maryland, Delaware, New Jersey and New York have a higher minimum wage than Pennsylvania. In four of those states, approximately 614,000 workers earned an increase in January 2019. Those increases include a $0.25 per hour adjustment for inflation in Ohio and New Jersey, a $0.50 per hour increase in Delaware, and a $0.70 to $2.00 per hour increase in New York State—the biggest increase in New York City. In addition, Job growth has been stronger in those states than in Pennsylvania, both overall and in industries like food services that are more likely to be affected by a minimum wage increase. Pennsylvania workers cannot afford to lose any more ground.
Pennsylvania’s $7.25 minimum wage stands 13.8% below the minimum wage in Delaware; 14.5% below the wage in Ohio ($8.30); 18.6% below New Jersey; 20.7% below the minimum in West Virginia ($8.75), 27.6% below Maryland’s wage ($9.25) and 43.4% below the minimum wage in most of New York state. In 1968, Pennsylvania minimum-wage workers earned over half (51%) of what the typical Pennsylvania worker made ($1.60 compared to $3.15).
Today, Pennsylvania minimum-wage earners will earn less than a third (31.9%) of what the typical Pennsylvania worker earns ($22.93 in 2018).
An increase in the minimum wage will lift the incomes of full-time, working adults. The minimum wage is no longer an entry point for young workers entering the workforce. Consider that:
- The majority of workers in the state who would get a raise as a result of a statewide minimum wage increase are adults (89.7%) working full-time (58.5%)
- 90% of the people impacted by a minimum wage increase to $15 are age 20 and older; and 42% are over the age of 40
- On average, the workers here that would benefit from a minimum wage increase earn half of their family’s income
- 1% of workers who would benefit from a higher wage are women
Low-wage workers are paying an especially steep price due to legislative inaction, according to an analysis by the Keystone Research Center. In the four years through June 2017, the 10th percentile wage has risen by $1.02 per hour, to $9.73 per hour in the region (defined as Pennsylvania’s six neighboring states and Washington D.C.). That increase amounts to $2,104 per year for a full-time, full-year worker. In Pennsylvania, the increase in the 10th percentile has been 33 cents per hour – a third lower. That difference cost full-time, full year workers at this wage level another $1,435 in annual income. As a result, when workers in the 10th percentile and below are included Pennsylvania workers received $362 million less in their paychecks in the 12 months spanning the second half of 2016 and first half of 2017 as a result of legislative inaction.
Raising the wage is a critical first step toward a strong and growing state economy; and closing the state budget deficit.