Frequently Asked Questions About A Minimum Wage Increase In Pennsylvania

“Doesn’t raising the minimum wage effect mostly teenagers?”

  • In Pennsylvania 90% of the people impacted by a minimum wage increase to $15 are age 20 and older; strikingly 42% are over the age of 40.

“Do teenagers really need a pay raise?”

  • Of those teenagers that would be affected by a minimum wage increase in Pennsylvania, they currently bring home on average 31% of their family’s income.  The jobs impacted by the minimum wage are an important source of income for many working families.

“Doesn’t raising the minimum wage destroy businesses and jobs, hurting those the minimum wage was intended to help?”

  • The minimum wage has increased in every state neighboring Pennsylvania and those increases have not impacted overall job growth or job growth in sectors most affected by a minimum wage increase like food services. In fact, even with the lowest minimum wage in the region, job growth overall and in food services have been SLOWER in Pennsylvania than in neighboring states.²

“Won’t raising the minimum wage hurt small business?”

  • Both big and small businesses pay low wages, and none of us would accept a small or larger business polluting our rivers or poisoning our food just to keep profits high. Raising the minimum wage rewards small and large businesses that profit while also paying living wages to their workers. To learn more about good employers that support a higher minimum wage, visit https://www.businessforafairminimumwage.org/

“Don’t studies show that minimum wage increases lead to job losses?”

  • There is a vigorous debate among economists about the impact of minimum wage increases. Although some economists disagree, the weight of evidence currently finds that modest increases in the minimum wage since 1990 of a dollar to two dollars from low levels have no observable impact on employment for workers most likely affected by a minimum wage increase.³ This means that increased labor costs are absorbed through other channels like lower turnover costs, higher prices, and lower profits. There has been less time to evaluate bold proposals that move the minimum wage to $15, but there is good reason to expect that, although some workers may end up working fewer hours in the year, their annual incomes thanks to the higher minimum wage will increase.⁴

 “Wasn’t the minimum wage intended to be an entry level wage, not a living wage?”

  • The minimum wage has always impacted both entry level wages and many lower-wage jobs held by adults for a career. The problem is the minimum wage doesn’t buy what it used to, pulling down wages in both entry level and career jobs. In 1968, the minimum wage in Pennsylvania was set at just over half (51%) the value of the median wage ($1.60 compared to $3.15) for full-time full-year workers. The minimum wage in 2018 is less than 32% of median wage ($7.25 compared to $22.93) –  its lowest point since the last time Pennsylvania raised the minimum wage in 2006.  Workers impacted by minimum wage increases are more productive and better educated today than similar workers in the past.⁵ It’s long past time to restore the purchasing power of the minimum wage.

“Does the minimum wage really impact families with children?”

  • Parents with children account for 24% of the workers impacted by a minimum wage increase to $15 in Pennsylvania.  Just one child adds $775 in monthly expenses for childcare in Pennsylvania. That single expense is more than half the monthly income for a worker employed full-time at the current minimum wage of $7.25.
 “Isn’t the best path to higher wages a skill or a college degree?”
  • Working full-time at the minimum wage a worker will bring home an income of $1,257 a month. The monthly total cost of attending a Pennsylvania community college full-time for a low-income student is $630, a figure which balloons to between $1,408 and $1,646 for a State System or state-related university. Private and for-profit colleges are even more expensive. It’s impossible to get skills for better-paying jobs when the jobs available don’t pay enough to afford education and training to acquire more skills. Workers stuck in an economic dead end are vulnerable to exploitation by a rogue’s gallery of payday lenders and for-profit colleges eager to saddle workers with debt packaged as a lifeline. A higher minimum wage is a critical first step to families providing themselves and their children the lifetime of better opportunities that come with higher skills.
“I sometimes hear lobbyists for businesses say they prefer an Earned Income Tax Credit to a minimum wage increase, why?”
  • The federal Earned Income Tax Credit is available to low-income working families with children and is most effective in lowering poverty and encouraging work when combined with a minimum wage increase. The tax credit is not a substitute for a minimum wage increase.  The corporate lobbyists that promote the tax credit as an alternative to a minimum wage increase to date have never actually advanced a proposal to expand the tax credit in Pennsylvania. They seem only to value it as a rhetorical device when justifying their opposition to the minimum wage.
“Won’t raising the minimum wage just raise prices and leave workers no better off?” 
  • The cost of a bag of French fries might rise by a few cents as a result of a minimum wage increase.⁶ But when the minimum wage is increased, the wages of workers affected by an increase grow faster than inflation, meaning workers have more buying power even if they are paying a few more cents for a bag of French fries. Even in fast food and other low-wage industries, front-line workers’ wages are a small fraction of the costs of goods and services and there are offsetting savings (for example from lower turnover) which hold down price increases.
“If raising the minimum wage is so good for the economy, why stop at $15?”
  • In 1968, the Pennsylvania minimum wage was half (51%) the value of the median wage ($1.60 vs. $3.15) for full-time full-year workers. In 2017, the median wage was $22.93 – more than three times the minimum wage. Our goal is to return the purchasing power of the minimum wage to just over half of the median wage by 2024.  Our statewide wage target of $15 would provide workers a monthly income of $2,600, a figure still short of the income needed to cover a basic monthly budget for a single adult of $3,025. Our goal is not to radically alter the economy, but to get back to rules of the road that guarantee that when the economy grows all workers benefit, not just corporate managers and high-paid ex-politicians-turned-lobbyists. 

“Won’t raising the minimum wage lead businesses to replace workers with machines?”

  • The replacement of workers with machines has been a feature of the economy since at least the invention of the steam engine in 1781. This replacement has been largely positive because the use of new technology creates new jobs in the economy as it destroys old jobs.  For example, DVD rental vending machines and Netflix replaced jobs once found in video rental stores. Those jobs were replaced by other employment in the local economy. Innovation in business practices sparked by higher wages is good for workers and the economy overall. There is also no evidence of lack of opportunity for workers impacted by a minimum wage in other states that have raised the minimum wage. Our focus should be in making sure that ALL the jobs in our local community allow workers to afford the basics.  
 
² Mark Price (2018). “The Pennsylvania Minimum Wage 2018”. Keystone Research Center. 
³ John Schmitt (2015). “Explaining the Small Employment Effects of the Minimum Wage in the United States”, Industrial Relations, October. 
⁵ John Schmitt and Janelle Jones (2012). “Low Wage Workers Are Older and Better Educated Than Ever”. Center for Economic Policy Research.  
⁶ Sylvia Allegretto and Michael Reich (2016). “Are Local Minimum Wages Absorbed by Price Increases? Estimates from Internet-based Restaurant Menus”. IRLE Working Paper No. 124-15.