The Update: What’s Important in Harrisburg and DC – June 29, 2023



In June, KRC’s releases have focused on the opportunities the legislature and Governor Shapiro have to enact a budget that addresses critical priorities that benefit working families. One priority is an overdue increase in the Pennsylvania minimum wage. The compromise proposal that passed the Pennsylvania House earlier in June would benefit an estimated 1.34 million people by January 1, 2026 when the state minimum wage would rise to $15 per hour. Another critical priority is higher education, an area where the Pennsylvania House budget also made progress, as detailed below. Thank you for supporting our work and please share the links below widely.

Stephen Herzenberg

Executive Director

KRC Analysis Shows Raising the Minimum Wage (HB 1500) Would Help 1.34 Million Pennsylvanians

KRC today released an analysis of HB 1500, a bill to raise Pennsylvanian’s minimum wage for the first time since 2009 that passed through the PA House recently. Overall, more than 1.34 million Pennsylvania workers would see their wages rise by 2026, the vast majority of whom are adults (89%) and are disproportionately women (60%) and people of color (30%).

Also, as noted by Keystone Research Center Senior Research Analyst Claire Kovach, “Decades of robust minimum wage research show that the prices of goods and services do not rise sharply after minimum wage increases, and that wage increases are not passed along to consumers in the form of substantially higher prices.” Read a press release about the new analysis here.

Higher Education Funding in the House-passed Budget Amendment

KRC also released an analysis of higher education investments in the recently-passed Pennsylvania House budget amendment (HB 611).
Pennsylvania ranks 47th in the nation for per capita state investment in higher education ($143 per capita), which is only about half of the national average ($288 per capita). Pennsylvania’s inflation-adjusted funding of public higher education has declined 41.9% since 1980, the most of any state.
The analysis highlights that the House-passed budget amendment would:
  • increase funding for the Pennsylvania State System of Higher Education (PASSHE) by $22 million (4%) over Governor Shapiro’s proposal and a 6% increase over last year;
  • invest $30 million for “facilities support” for PennWest University (the three state system campuses that were consolidated last year – California, Clarion, and Edinboro);
  • increase funding for community colleges by $10.3 million (4%) over Governor Shapiro’s proposal and a 6% increase over last year; and
  • increase funding for approved projects to modernize education and workforce training facilities at community colleges by $8 million, the amount requested by the PA Commission.

The analysis concludes  underscoring the stakes for students and businesses in the Commonwealth.

“The Senate should approve these increases on a bipartisan basis—because those most harmed by Pennsylvania’s underfunding of higher education include individuals and businesses in rural areas,” they write. “Individuals have no access to affordable college and the postsecondary credential that might help them access a living-wage job. Businesses cannot find workers with the postsecondary credentials and skills they seek. Communities spiral down including in college towns with declining enrollment.”

You can read the full analysis here and the press release here.

Pennsylvanians Living Near State Border Commute to Higher Wage Jobs in Surrounding States

Executive Director Stephen Herzenberg and Senior Research Analyst Claire Kovach released an analysis of economic activity near the New York/Pennsylvania border and the New Jersey/Pennsylvania border to determine how vast differences in the minimum wage between the states would affect employment and wages in two low-wage sectors, along with leisure and hospitality, and retail.

The analysis finds that wages increased more in New York and New Jersey, dramatically so in the leisure and hospitality sectors. Employment trends differed little from state to state with one exception—leisure and hospitality employment grew significantly more in New York.

The New Jersey and Pennsylvania border county matchup shows similar trends in the leisure and hospitality industry.

While Pennsylvania’s minimum wage has remained at the federal minimum of $7.25/hr since 2009, New York’s minimum wage now sits at $14.20, while New Jersey’s is $14.13. Both New York and New Jersey are currently scheduled to move to $15/hr with an index to inflation.

You can read the full analysis here and the press release here.

Outsourcing Food Service to Contractors Doesn’t Save Pennsylvania School Districts Money

Earlier this month, KRC released a new report that details how outsourcing food services is not saving school districts money, as is often promised by food service contractors, and results in higher costs for school districts on average.

Diana Polson, PhD, and Claire Kovach, PhD, co-authors of the new report “False Promises: Food Service Contractors Don’t Save Pennsylvania School District Money,” used a mix of rigorous statistical analysis and interview-based qualitative research to find that contracting food services—their management or the entire operations—does not yield the financial benefits school districts are promised by contractors.

The report found that, when compared to years that a district staffs its own cafeteria, the presence of Food Service Management Contractors (FSMC) results in net income (what schools call an “operating position”) that is nearly $40,000 lower than in years with no FSMC involvement, on average. The report also highlights a cooperative of school district food service directors – the Pittsburgh Regional Food Service Directors network – that provides to self-providing districts through group purchasing the main benefits contractors claim: cost savings on food and reduced management headaches with food purchasing. The network also provides invaluable peer learning and continuing education/professional development for food service directors.

View the webinar about this report hereDownload a PDF of the report here. Read a press release about the report here.


In the Media

Philadelphia metro labor market ‘really resilient’ as region rebounds WHYY 6/1/23

PA could see $15 minimum wage by 2026 NBC via Keystone State News 6/16/23

‘Some people have three jobs’: All eyes on Harrisburg for a minimum wage hike Penn Capital-Star 6/18/23

Raising Pa.’s minimum wage could stop workers leaving the state for jobs: study Pennlive 6/20/23

Higher-Ed System Budget at Stake in PA Senate Public News Service 6/23/23

The time is right for Pa. to finally raise its minimum wage | Opinion Penn Capital-Star 6/23/23

Time to catch up with neighbors Bradford Era + Republican & Herald 6/24/23

Erie’s United Electrical Workers Strike at Wabtec Erie Reader 6/26/23

Pa. Senate panel clears phone tax, housing rebate bills as House tees up corporate tax bills Pennlive 6/28/23

It’s time for Pennsylvania to significantly raise its minimum wage | Editorial Courier Express 6/29/23