Minimum Wage

When jobs don’t pay enough for our neighbors to afford the basics—things like food, car repairs and eyeglasses—it hurts the local economy. Wages are so low now that they don’t even cover rent and the cost of getting around, forcing working people to rely on the local food bank to help make ends meet. Raising the minimum wage can help restore spending on the basics and, in the process, boost the local economy.

Issue Basics

Due to the Pennsylvania legislature’s failure to raise our state minimum wage, Pennsylvania’s low-wage workers have lost ground relative to their counterparts in surrounding states, especially in rural areas.

Minimum-wage workers in Pennsylvania have also lost ground relative to workers in the middle of the wage distribution, that is, relative to the median wage. The Pennsylvania General Assembly last raised the minimum wage in July 2007 to $7.15 per hour or about two fifths (39%) of the then-median wage for full-time, full-year workers in Pennsylvania ($18.23).  With the Pennsylvania minimum wage now fixed at the federal minimum of $7.25, Pennsylvania’s minimum-wage earners will earn less than a third (29.7%) of what the typical Pennsylvania worker earns ($24.44 in 2019). Back in 1968, Pennsylvania minimum-wage workers earned over half (51%) of what the typical Pennsylvania worker made ($1.60 compared to $3.15).

Twenty-four states have increased their minimum wage since January 2014. In our region, the minimum wage has gone up in surrounding states but not in Pennsylvania. As of January 2019, Pennsylvania’s minimum wage remains at $7.25 and stands 21% below the minimum wage in Delaware (where the minimum wage is $8.75), 18% below the wage in Ohio ($8.55), 22% below New Jersey’s minimum ($8.85), 21% below the minimum in West Virginia ($8.75), 39% below Maryland’s wage ($10.10), 53% below the minimum wage in most of New York state ($11.10; the minimum wage in New York City is $15 and the minimum wage is $12 in Nassau, Suffolk, and Westchester counties), and 83% below the minimum wage in the District of Columbia ($13.25).

Corporations have used their power to weaken the minimum wage and feed the growth of inequality. We recommend that policymakers restore the purchasing power of the minimum wage by returning it to roughly half of the median wage for full-time full-year workers. Current proposals to raise the minimum wage in Pennsylvania to $15 by the middle of the next decade are consistent with this goal. Enabling working class families to better afford the basics boosts family incomes for white, black, and brown families in every part of Pennsylvania and, in the process, boosts spending in the broader economy.

Key Facts

Recommended READING

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