Economic Policies That Raise Wages

Mark Price |

Below is the fourth in a series of excerpts from The State of Working Pennsylvania 2015 report, released by Keystone Research Center on Sept. 2, which will appear on Third and State in the coming weeks:

Raise the Minimum Wage

The most direct route to raising wages for low-wage workers is to raise the minimum wage. Federally the campaign to raise the minimum wage remains blocked by a Republican majority in the U.S. House and Senate.

Similarly here in Pennsylvania the leadership of the Republican majorities in both chambers of the General Assembly have yet to permit a vote on any one of several bills that would raise the minimum wage from $7.25 to between $8.75 and $15 per hour. So far this year only the Senate’s Labor and Industry Committee chaired by Lisa Baker (R) and minority chair Christine Tartaglione (D) has even held a hearing on the minimum wage. None of the minimum-wage bills have been voted out of that committee and considered by the full Senate.

Although Gov. Wolf included his support for a higher minimum wage in his initial state budget proposal he has not made passage of a higher minimum wage a condition of his final compromise with the Republican leadership over the state budget.

Continuing delay of a state minimum-wage increase is costly to millions of Pennsylvania workers. Raising the minimum wage to $10.10 would raise the wages of 1.2 million workers and boost total wages by $1.8 billion.

To examine the number of workers in your county that would see their wages rise if the minimum wage were raised go to

Currently 29 states including the District of Columbia have a minimum wage higher than $7.25.  Across the country in the last year, there has been a growing movement to increase the minimum wage. For example, the City of Los Angeles adopting a proposal to raise the minimum wage to $15 per hour and most recently the state of New York adopted a minimum wage for fast food workers of $15 per hour.

There is broad public support[1] in Pennsylvania for a higher minimum wage. Moreover, Republicans have introduced their own legislation to raise the minimum wage. All that remains is for leadership in both chambers to allow a vote.

Overtime Pay

Most blue-collar workers are entitled to be paid 1.5 times their regular pay rate for each hour of work per week beyond 40 hours.  Overtime eligibility for workers paid a salary depends on how much they are paid and the nature of their job duties.  Currently, salaried employees earning less than $455 per week – $23,660 per year – are automatically eligible for overtime.[2] The U.S. Labor Department has proposed a rule change which would raise this threshold to $933 per week.[3]  This change would benefit 493,000 or 24.6% of salaried workers in Pennsylvania.[4]

The U.S. Labor Department published this rule change as a Notice of Proposed Rulemaking in the Federal Register on July 6 of this year and the period for public comment closes on Sept 4th.  Once public comments have been collected and analyzed by the U.S. Labor Department the agency will decided whether to modify the current rule as proposed a process that will take another 6 to 10 months.

Like a minimum-wage increase, increasing the number of workers with a right to overtime will help boost the pay of thousands of Pennsylvania workers.  Unlike a minimum-wage increase the salaried workers that would benefit have earnings that place them in the broad middle of the wage distribution, between $12 and $24 dollars an hour.[5]

Earned Leave

Another important dimension of pay is the right to earned leave when a worker gets sick. Access to earned sick leave is much less common among low-wage workers.[6] The Institute for Women’s Policy Research estimates that in total 1.8 million Pennsylvania workers do not have access to paid leave.[7]

Since that estimate was released, the City of Philadelphia enacted an ordinance entitling workers in the city of Philadelphia to one hour of earned leave for every 40 hours of work.[8]  Pittsburgh followed up this year with its own ordinance entitling worker in the city to one hour of paid leave for every 35 hours of work.[9]

At the state level, Sen. Vincent Hughes (D) has introduced legislation that would entitle all workers in Pennsylvania to accrue one hour of paid leave for every 30 hours of work.[10] A statewide ordinance that establishes a minimum amount of earned leave would benefit well over a million workers (i.e., 1.8 million minus workers already covered by the Pittsburgh and Philadelphia ordinances).

[1] Two thirds of registered Pennsylvania voters support raising the minimum wage to $10.10 per hour.…

[2] Salaried workers earning more than $455 a week are exempted from the right to receive overtime if their job duties fall into one of three categories: professionals, administrators, and executives.

[3] This is the 40th percentile of earnings for full-time salaried workers in 2013 (expressed in 2014 dollars).

[4] Lawrence Mishel and Ross Eisenbrey 2015. “Raising the overtime threshold would directly benefit 13.5 million workers: Here is a breakdown of who they are”, Economic Policy Institute

[5] The workers affected have earnings that place them somewhere between the 30th and 70th percentiles of wage earners.

[6] See for example page 3 of Institute for Women’s Policy Research. 2015 “Access to Paid Sick time in Pittsburgh, Pennsylvania”

[7] Institute for Women’s Policy Research. 2010. “Fact Sheet: Access to Paid Sick Days in the States, 2010”…

[8] With the maximum accrual set to 40 hours for workers employed in establishments with 10 or more employees, workers in firms with less than 10 workers are entitled to up to 40 hours of unpaid leave.

[9] With the maximum accrual set to 40 hours for workers employed in establishments with 15 or more employees, workers in firms with less than 15 workers are entitled to up to 24 hours of paid leave starting after May 13 2016.

[10] A most under SB 221 a worker could accrue 56 hours or seven days of paid sick leave in a year.