Over the past four years, the six states bordering our Commonwealth, along with the District of Columbia, have raised their minimum wage on an average of 26%. Pennsylvania’s minimum wage remains at $7.25 an hour. In 2018, it is time for poverty wages such as these to come to an end.
Currently, Pennsylvania cities that would likely raise their minimum wage are prohibited by state law. While median wages are rising in some areas around the state, many communities are experiencing higher rates of poverty than before because workers in minimum and low-wage jobs are stuck.
Workers in food service, retail and other traditionally “low-wage” jobs, deserve to be treated with dignity and to earn a living wage. We need to end the two-tier system of the “tipped” minimum wage where workers earn $2.83 per hour; tipped wage workers experience poverty at higher rates than their brothers and sisters receiving full wages.
Researchers at the Keystone Research Center released a report this week detailing the need to raise the minimum wage in Pennsylvania and a few key solutions for consideration. Check out some highlights below, or visit keystoneresearch.org for the full report.
- The Pennsylvania minimum wage this January at $7.25 stands 13.8% below the minimum wage in Delaware (where the minimum is $8.25), 14.5% below the minimum in Ohio ($8.30), 18.6% below New Jersey’s minimum ($8.60), 20.7% below West Virginia ($8.75), 27.6% below Maryland ($9.25), 43.4% below most of New York state ($10.40, the minimum in New York City, Long Island & Westchester is higher ranging from $11 to $13 depending on firm size and location), and 72.4% below the District of Columbia ($12.50).
- Examining county-level data on employment and average weekly wages drawn from a survey of employers in food services and drinking places, a sector with a large share of low wage workers, we observe more growth in wages and employment especially in New York, northern West Virginia, and Maryland than in Pennsylvania.
- Overall in Pennsylvania, real wages in food services grew by just 5% while on average across the region (Delaware, District of Columbia, Maryland, New Jersey, New York, Ohio, and West Virginia) they grew 7.8% between 2012 and 2016. Wage growth in food services has been particularly low in many rural of Pennsylvania.
- Not only has wage growth been stronger in the rest of our region where the minimum wage has increased, but so has employment growth. As the purchasing power (after accounting for inflation) of the minimum wage rose 12% across the region, payroll growth in food services was up 12.3% compared to much slower growth of 6.8% in Pennsylvania where the minimum wage lost 4.7% of its purchasing power from 2012 to 2016.
- The report estimates that a minimum wage increase implemented by this coming July to $9 will close the gap that has emerged since 2007 in the earnings of the lowest wage workers and those at the median (full-time full-year workers). Doing so would raise the wages of 791,000 workers boosting their total earnings by $894 million.