Economists Sign on to Letter Urging Pennsylvania Legislature to Raise the Minimum Wage to $15/Hour

Experts stress ending tipped minimum wage; benefits for small businesses and local economies
Date of Press Release: 
March 13, 2019

HARRISBURG - Thirty-eight economists and social scientists in related fields signed on to a letter urging the state legislature to raise Pennsylvania's minimum wage to $15 by the year 2025, which would directly lift the wages of nearly 1.5 million when fully implemented. An estimated half a million additional workers who currently make just above $15 an hour would see a wage increase as employers adjust their internal wage scales. 

"Jobs should at least pay enough for workers to afford the basics, and when people have more money to spend it will boost Main Street economies and help all Pennsylvanian's families thrive and prosper—rural and urban, White, Black and Brown,” said Mark Price, Labor Economist with the Keystone Research Center.

The signatories of the letter also recommend indexing the minimum wage to median wages to protect against future erosion. Workers in Pennsylvania earning today's minimum wage of $7.25 per hour earn 29% less per hour than their counterparts made 50 years ago (after adjusting for inflation). Beyond that, the group suggests gradually phasing out the outdated sub-minimum wage for tipped workers, which is currently only $2.83 per hour in Pennsylvania, a rate that has not changed since 1998.

"The Commonwealth is making bipartisan progress investing in workforce training to help workers step up to higher-paying jobs," said Stephen Herzenberg, Executive Director of the Keystone Research Center, which circulated the sign-on letter. "But too many jobs don't pay enough for workers or employers to invest in acquiring new skills and end up being a revolving door. Raising the wage floor is essential to shifting from low skills and low wages to high skills and good jobs in Pennsylvania."

The last decade has seen a wealth of rigorous academic research on the effect of minimum wage increases on employment with the weight of the evidence showing that previous, modest increases in the minimum wage had little or no negative effects on the employment of low-wage workers. A $15 minimum wage by 2025 would result in about $6.5 billion in higher wages for 2 million low-wage Pennsylvania workers, which would also benefit their families and their communities.

Governor Tom Wolf called for an increase in the minimum wage to $12 an hour immediately and $15 an hour by 2025 in this year's budget address. Such a plan would save taxpayers an estimated $36 million in Medicaid costs in 2020 year and $119 million the following year.