Small Business Job Growth Faster In States With Minimum Wages Higher Than $5.15

Findings Contradict Stories Told By Minimum Wage Opponents

Keystone Research Center Releases Revised Fact Sheet on Effects of Raising Pennsylvania’s Minimum Wage

Harrisburg, PA – The Albany, New York, based Fiscal Policy Institute (FPI www.fiscalpolicy.org) today released a new study demonstrating that job growth among small businesses was faster in recent years in states with a minimum wage higher than $5.15 per hour.

The Keystone Research Center (KRC www.keystoneresearch.org) co-released the new FPI study in Pennsylvania along with a revised Fact Sheet summarizing findings from recent KRC studies on the effects of raising the state’s minimum wage, a measure still being considered by the General Assembly.

“FPI’s new evidence shows that a higher minimum wage not only benefits workers but can spur economic growth that benefits small business owners” said KRC labor economist Mark Price. “Increases in labor costs are offset by savings from lower recruitment and training costs and by greater revenue from increased sales.”

read more | download pa fact sheet (PDF) | Minimum wage page

NEW KRC RESEARCH RECENTLY RELEASED

Stuck on the Bottom Rung of the Wage Ladder

Pennsylvania lawmakers are currently considering whether to increase the state’s minimum hourly wage. In this debate, one question concerns whether the earnings of workers at the low end of the job market will increase even without a higher minimum wage. The National Federation of Independent Business claims, for example, that 63% of minimum-wage workers receive wage increases after one year, and therefore a minimum wage increase is unnecessary.

A new KRC Briefing Paper shows that mobility out of low-earning jobs is limited. Among the 670,000 individuals who started out with below-poverty-level earnings in 1998 and worked substantially in Pennsylvania in 2004, KRC finds that

• 261,000 -- about two in five -- still had below-poverty-level earnings in 2004 (i.e., $6.26 per hour for a full-time, full-year worker);

• 245,000, another nearly two in five, had earnings in 2004 of at least one but less than two times the poverty level and thus below what economists consider a “self-sufficiency” income ? i.e., an income high enough to pay for a basic needs budget without public assistance.

read more | download PDF

New National Study Shows Income Inequality Grew Significantly in Pennsylvania from 1980s to 2000s

Bottom Quintile Gains Average of 22.3% (or $3,381) as Top Quintile Gains Average of 76.6% (or $56,098) Over 20 Years

In Pennsylvania, the gap between high-income families and poor and middle-income families grew significantly from the early 1980s to the early 2000s, according to a new nationwide study by the Center on Budget and Policy Priorities and the Economic Policy Institute, co-released today with the Keystone Research Center.

Pulling Apart: A State-By-State Analysis of Income Trends, compares data for 2001-03 with 1980-82, a comparable period of recession and slow job growth.

Pulling Apart also highlights income levels and trends in “post-tax income.” This includes the value of the Earned Income Tax Credit that benefits low-income families and also includes the cash value of food stamps, subsidized school lunches, and housing subsidies.

“The story told by this data is that inequality has grown nationally but it has grown even more in Pennsylvania,” said Stephen Herzenberg, an economist and executive director of the Keystone Research Center. “It is striking that Pennsylvanian’s inequality grew more in a period that starts after the job loss of the 1970s had already begun to winnow the Commonwealth’s middle class.”

read more | download PA fact sheet

RECENTLY RELEASED

Losing Ground in Early Childhood Education

Since the early 1980s, there has been a large and unsettling dip in the qualifications of the center-based early childhood workforce nationwide, with 30% of teachers and administrators now having just a high school diploma or less, according to a comprehensive new report published on September 15, 2005 by the Economic Policy Institute, the Keystone Research Center, and the Foundation for Child Development.

You can read more about the new national report and seven state-level companion reports written by KRC at www.earlychildhoodworkforce.com.

Losing Ground in Pennsylvania Early Childhood Education

In the 1980s about 40 percent of teaching staff in Pennsylvania's center-based preschool programs outside the public schools had a four-year college degree. Today, according to a new study by the Keystone Research Center, the number is 27 percent.

The study, Losing Ground in Pennsylvania Early Childhood Education, also reports that the share of staff with a high school degree or less has risen from 34% in the mid 1980s to 43% in the 1998-2004 period.  (Teaching staff, also referred to as early childhood educators, include teachers, administrators, assistant teachers, and aides.)

The decline in the educational level of early childhood educators at a time when the overall workforce became more educated is cause for concern according to Stephen Herzenberg, executive director of the Keystone Research Center and an author of the study. An online summary of the Pennsylvania paper is available at www.earlychildhoodworkforce.com.
read more On Losing Ground

The State of Working Pennsylvania 2005: Wages Stagnate or Decline For Most Pennsylvania Workers

KRC has just released its tenth annual State of Working Pennsylvania report on the condition of the state's economy from the point of view of its middle class

This year's report details how wage stagnation has spread throughout most of the Pennsylvania wage distribution in 2003, with the lowest-paid workers losing ground for the third year in a row.

In spite of three years of over-all economic recovery, the inflation-adjusted hourly earnings of typical low-wage Pennsylvania workers fell 10 cents per hour between 2003 and 2004 and 15 cents per hour since 2001, to $7.16 per hour. Falling wages contributed to a rise in Pennsylvania poverty rates by 20 percent since 1999-2000.

The State of Working Pennsylvania 2005 argues that the General Assembly should raise Pennsylvania's minimum wage to offset declining wages and purchasing power for the Commonwealth's low-wage workers.

To download the report free of charge and for more on SWP 2005 visit www.stateofworkingpa.com.

Minimum Wage

Stephen Herzenberg Testifies Before PA Senate Labor and Industry Committee

KRC Executive Director Stephen Herzenberg recently testified before the Pennsylvania Senate's Labor and Industry Committee during its hearings in Philadelphia on the minimum wage.

Dr. Herzenberg made the case for raising Pennsylvania's minimum wage as an appropriate response to the wage decline among low wage workers documented in The State of Working Pennsylvania 2005. The text of Herzenberg's testimony submitted to the committee is available for download, and a summary of The State of Working Pennsylvania 2005 is available at www.stateofworkingpa.com.

Over forty academic and private-sector economists from around the state signed the statement calling for a rise in the Pennsylvania's minimum wage and explaining its importance to the Commonwealth's economy. You can read the economists' statement or download a pdf version from: www.paminimumwage.com