Pennsylvania’s minimum wage debate revisited

By Christen Smith | The Center Square

HARRISBURG, PA – The pandemic’s impact on income growth aside, lawmakers say workers need not wait for another “once-in-a-century” emergency to earn a livable wage.

And the time has finally come, according to the House Democratic Policy Committee, to use their narrow majority to more than double the state’s minimum wage from $7.25 to $15 per hour.

“Too many people have worked too hard for too long to not be able to pay their bills,” said Rep. Patty Kim, D-Harrisburg. “We are not going to wait another 14 years to raise the minimum wage.”

Pennsylvania and 19 other states still offer minimum wages aligned with the federal rate of $7.25 per hour. The rest – including all of the commonwealth’s neighbors – have increased pay to between $10 and $14 per hour.

Kim said Monday she’s been advocating for a higher rate since 2013, though strong Republican majorities in both chambers prevented the legislation from moving forward. On Monday, she said any raise enacted should be tied to inflation – as lawmakers salaries are – “so that we never have to have this conversation again.”

Close calls have unfolded over the years, with some Senate Republicans supporting a $10 minimum wage as recently as 2021, The Center Square previously reported. The offer wasn’t enough to strike a deal with Democrats in the chamber, however.

And in 2019, the Senate forged a compromise with former Gov. Tom Wolf to raise the wage to $9.50 by 2022, but the measure lacked support from the House’s GOP majority.

But now, with Democrats in control of both the lower chamber and the governor’s mansion, there’s more leverage to make a deal – though it will be hard given the inflationary strain on the economy.

As of now, Senate Majority Leader Joe Pittman, R-Indiana, said creating “maximum wage jobs” is a bigger priority.
“This period of high inflation cannot be addressed through artificial minimum wage increases,” he said. “Family sustaining wages must grow if we are going to truly help the residents across this commonwealth who are struggling financially.”

But for Genale Rambler, a home health care worker from Myerstown, raising the wage would “be life changing.” Rambler and her husband sink every dollar they earn into caring for her ailing parents. They’ve sold their home, drained their savings account and forgone medical care to cover the bills, she said.

“We hear all the time that workers are already making above $15, and that elected leaders don’t need to take action on this issue,” she said. “This is simply not true. I am a skilled, trained caregiver, and I make less than $15 an hour.”

Federal data shows just under 64,000 residents make $7.25 or less an hour and nearly three-quarters of those include tipped workers. Another 418,000 make up to $12 an hour, and 510,000 earn between $12 and $15 per hour.

Further, the number of “at-or-below” workers declined more than 40% between 2017 and 2022 – largely due to the pandemic-induced labor shortage.

Claire Kovach, a senior research analyst at the Keystone Research Center, said one in four workers would benefit from a $15 minimum wage, which would boost annual earnings by an average of $4,300.

Most of those workers, according to the center, include women between the ages of 20 and 49 and people of color, while 18% are over the age of 55. This busts the myth, Kovach said, that most minimum wage earners are “high school kids flipping burgers.”

Critics of the policy argue that businesses will cut positions or reduce hours to cover the cost of wage mandates, erasing its economic benefits for workers. A recent analysis from the Independent Fiscal Office found that a $12 an hour rate could cost Pennsylvania 5,000 jobs.

Lowering total work hours for employees also jeopardizes health and retirement benefits, according to 2021 study from the Harvard Business Review. Researchers examined schedule and pay data for more than 5,000 workers in California, where the minimum wage rose from $9 to $11 per hour between 2015 and 2018 – and every year since.

For every $1 increase in the minimum wage, the average number of work hours for each employee dropped 20.8%, correlating to an average earnings decrease of 13.6%. Researchers concluded employers recovered 27.5% of the cost of the mandate using this strategy.

Andrea Grove-Musselman, owner of Elementary Coffee in Harrisburg, told the committee she’s seen no negative revenue impacts as a result of offering her nine employees wages higher than the minimum rate.
She argued her employees work harder, provide better service and bring in more customers, boosting her overall bottom line.

“My business is my family,” she said. “There’s a level of sacrifice you take on when becoming a business owner. It’s tough, but I honor my employees by paying them a livable wage.”