Minimum Wage Increases Didn’t Hurt Job Growth in Other States; It’s Time for PA to Join the Club

Natalie Sabadish |

Last week, Michigan passed a bill to increase its minimum wage from $7.40 an hour to $9.25 an hour over the next four years. Michigan is the seventh state, in addition to D.C., to legislate a minimum wage increase thus far in 2014. Additionally, as of yesterday, 22 states across the country, including all six of Pennsylvania’s neighboring states, have a wage floor higher than the national level of $7.25 per hour. Support for raising the minimum wage is building among Pennsylvanians so that our workers are not left even further behind.

On Tuesday, June 3, Raise the Wage PA—a coalition of labor, religious, community, women’s and worker’s groups—will be holding a rally and lobby day at the Pennsylvania Capitol building at 1 p.m. urging lawmakers to increase the state’s minimum wage to at least $10.10 per hour. Bills to raise the minimum wage have been recently introduced in both chambers of the Pennsylvania legislature. An increase of this magnitude would boost the incomes of about one million workers in the state, most of whom are adults working in mid- to full-time jobs (more than 20 hours per week).

Despite common misconception, increases in the minimum wage do not have significant negative impacts on employment. In fact, the most rigorous economic research shows that state-level minimum wage increases in the last 20 years raised worker pay without causing job losses, even in regions where the economy was weak and unemployment was high.

Additionally, job growth in Pennsylvania has actually been slower than in states that have recently increased their minimum wage. The figure below shows average annual job growth in Pennsylvania since January 2010 (the beginning of the first full year of economic recovery) as well as in states that have experienced minimum wage hikes during the same time. Employment changes in these states represent job growth since the implementation of each respective state’s most recent wage hike and for which there are at least 12 months of jobs data since the raise. (For example, while Ohio’s minimum wage rose in January 2014, this graph looks at average annual employment growth since the previous increase in January 2013, or from January 2013 to April 2014.)

Since January 2010, annual job growth in Pennsylvania averaged 0.80 percent. All 14 states that implemented an increase since then have experienced a faster pace of employment gain, ranging from 0.84% in Vermont to 3.13% in Florida. It is clear a minimum wage increase would not hurt job growth. It would, however, increase incomes and living standards for hundreds of thousands of low-wage workers in Pennsylvania, boost the state’s economy by putting more money in the hands of those most likely to spend it, and strike a significant blow to the state’s runaway income inequality.