STATEMENT: On Gov. Wolf's Proposal to Raise PA's Minimum Wage

Date of Press Release: 
January 30, 2019

HARRISBURG — Keystone Research Center’s Economists Stephen Herzenberg and Mark Price made the following statement about Governor Tom Wolf’s proposal to raise the minimum wage to $15 by 2025:

"Today Governor Tom Wolf, Representatives Patty Kim and Chris Rabb and State Senator Tina Tartaglione proposed an urgently-needed modernization of Pennsylvania’s minimum wage statute. Their proposal calls for raising the minimum wage in stages to $15 by 2025; establishing one fair wage for all workers including hundreds of thousands of tipped workers, two-thirds of whom are women, who currently can only count on a sub-minimum wage of $2.83 per hour; and for indexing the minimum wage to inflation starting in 2026 to prevent rising prices from eroding the purchasing power of the minimum wage. The proposal also calls for reducing wage theft by clamping down on employers who pay workers below what the law requires. Finally, the governor proposed empowering local governments in Pennsylvania to establish a higher minimum wage than the state minimum.

"We estimate this legislation would lift wages for 2.2 million Pennsylvania workers who have seen their pay grow more slowly than workers in all of our neighboring states, in part because those states have raised their minimum wage as the federal minimum wage has remained stuck at $7.25.

“We congratulate the Governor and members of the General Assembly for seeking to remedy the slow growth in the value of the federal and state minimum wage, which has needlessly stressed working families by making it difficult for them to afford the basics. By our estimates, the minimum wage in 1968 at $1.60 per hour was half (51%) of the median wage for full-time full-year workers. Today at $7.25 the minimum is just 30% of the median wage. If today’s proposal is enacted by the General Assembly, we predict a minimum wage of $15 in 2025 would stand at 53% of the median wage. By raising the wage floor, this proposal will restore spending on the basics and help boost local economies all across the Commonwealth.

“Today’s proposal is also a crucial first step in a multi-pronged approach to ensure no Pennsylvania child experiences poverty. We estimate that raising the minimum wage to $15 would lift almost 300,000 children above the federal poverty level.

“We also applaud this proposal for extending to local governments the power to set a higher minimum wage; as we have pointed out, high costs for housing, transportation and health care(map) in some Pennsylvania communities mean a $15 minimum wage falls well short of what families need to afford the basics, most especially in the southeastern parts of the state. Today’s proposal returns to communities the power to make sure jobs pay a livable wage.

“Today’s proposal to enact one fair minimum wage for all workers represents an overdue improvement over past legislative proposals in Pennsylvania that left in place a sub-minimum wage for workers who earn at least $30 a month in tips.  Research shows that wages including tips are higher, poverty rates lower, and reports of sexual harassment by women half as highamong tipped workers in states that have one fair minimum wage for all workers.

“Today’s proposal also begins the long overdue process of bringing labor law enforcement in Pennsylvania into the 21st century, raising penalties for employers who steal worker wages and using the proceeds to step up enforcement. Research shows that in any given work week almost 400,000 Pennsylvanians experience wage theft.

“After a half century of rigging the economy against working people, the minimum wage has fallen drastically below these benchmarks—and the tipped minimum wage has also fallen drastically. This modest proposal put forward by Governor Wolf, Sen. Tartaglione, and Rep. Kim seeks simply to restore a modicum of fairness in our economy for people who work hard and play by the rules.”