Minimum wage increases didn’t hurt job growth in other states; it’s time for PA to join the club

Last week, Michigan passed a bill to increase its minimum wage from $7.40 an hour to $9.25 an hour over the next four years. Michigan is the seventh state, in addition to D.C., to legislate a minimum wage increase thus far in 2014. Additionally, as of yesterday, 22 states across the country, including all six of Pennsylvania’s neighboring states, have a wage floor higher than the national level of $7.25 per hour. Support for raising the minimum wage is building among Pennsylvanias so that our workers are not left even further behind.

On Tuesday, June 3, Raise the Wage PA – a coalition of labor, religious, community, women’s and worker’s groups – will be holding a rally and lobby day at the Pennsylvania Capitol building at 1 pm urging lawmakers to increase the state’s minimum wage to at least $10.10 per hour. Bills to raise the minimum wage have been recently introduced in both chambers of the Pennsylvania legislature. An increase of this magnitude would boost the incomes of about one million workers in the state, most of whom are adults working in mid- to full-time jobs (more than 20 hours per week).

Despite common misconception, increases in the minimum wage do not have significant negative impacts on employment. In fact, the most rigorous economic research shows that state-level minimum wage increases in the last 20 years raised worker pay without causing job losses, even in regions where the economy was weak and unemployment was high.

Additionally, job growth in Pennsylvania has actually been slower than in states that have recently increased their minimum wage. The figure below shows average annual job growth in Pennsylvania since January 2010 (the beginning of the first full year of economic recovery) as well as in states that have experienced minimum wage hikes during the same time. Employment changes in these states represent job growth since the implementation of each respective state’s most recent wage hike and for which there are at least 12 months of jobs data since the raise. (For example, while Ohio’s minimum wage rose in January 2014, this graph looks at average annual employment growth since the previous increase in January 2013, or from January 2013 to April 2014.)

Since January 2010, annual job growth in Pennsylvania averaged 0.80 percent. All 14 states that implemented an increase since then have experienced a faster pace of employment gain, ranging from 0.84 percent in Vermont to 3.13 percent in Florida. It is clear a minimum wage increase would not hurt job growth. It would, however, increase incomes and living standards for hundreds of thousands of low-wage workers in Pennsylvania, boost the state’s economy by putting more money in the hands of those most likely to spend it, and strike a significant blow to the state’s runaway income inequality.


0 comments posted

Post new comment

Comment Policy:

Thank you for joining the conversation. Comments are limited to 1,500 characters and are subject to approval and moderation. We reserve the right to remove comments that:

  • are injurious, defamatory, profane, off-topic or inappropriate;
  • contain personal attacks or racist, sexist, homophobic, or other slurs;
  • solicit and/or advertise for personal blogs and websites or to sell products or services;
  • may infringe the copyright or intellectual property rights of others or other applicable laws or regulations; or
  • are otherwise inconsistent with the goals of this blog.

Posted comments do not necessarily represent the views of the Keystone Research Center or Pennsylvania Budget and Policy Center and do not constitute official endorsement by either organization. Please note that comments will be approved during the Keystone Research Center's business hours.

If you have questions, please contact [email protected]

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <p> <img>
  • Lines and paragraphs break automatically.
Refresh Type the characters you see in this picture. Type the characters you see in the picture; if you can't read them, submit the form and a new image will be generated. Not case sensitive.  Switch to audio verification.