If the New Budget Raises the Sales Tax, It Should Also Raise the Minimum Wage

Date of Press Release: 
November 13, 2015

If New Budget Raises Sales Tax, It Should Also Raise Minimum Wage
Nov. 13, 2015

In light of news reports that a state budget agreement will include an increase in the sales tax, Keystone Research Center labor economist Dr. Mark Price released the following statement today:

"The sales tax is a highly regressive tax that disproportionately burdens low-income workers. To offset the impact of this:

  • It is imperative that the final budget agreement include an increase in the minimum wage.
    • Increasing the minimum wage to $10.10 per hour would boost the economy by enabling 1.2 million workers to afford more of the basics.
    • A $10.10 hourly minimum wage would also provide an estimated $231.5 million in savings for the state budget by reducing the state share of Medicaid costs.
  • Property tax relief funded by a sales tax increase must be distributed in a progressive way.
    • This relief should include a renter rebate.
    • The rest of the property tax relief should go to moderate- and low-income homeowners, businesses and upper-income homeowners.
  • As we have explained in our Policy Watch released yesterday, a minimum wage increase to $10.10 per hour, adjusted annually for inflation, will restore the purchasing power of the minimum wage lost since 1968."

The Pennsylvania Budget and Policy Center, a project of KRC, issued yesterday an analysis of the tentative budget framework that lists raising the minimum wage to $10.10 per hour as one of the revenue options available to budget negotiators.