Resolution of State Budget Must Include Minimum Wage Increase and Greater Investments in Higher Education

The director of Pennsylvania Working Families wrote an excellent op-ed calling for the General Assembly to raise the minimum wage as it resolves the state budget. You will remember Gov. Wolf made raising the state’s minimum wage a key priority in his initial budget address in March. As yet, the Republican leadership has not advanced for consideration by the full House and Senate any of the legislation that would raise the minimum wage in Pennsylvania, including a bill to raise it to $10.10 per hour co-sponsored by the Republican chairman of the Senate Appropriations Committee.

In related news, Sandhya Kambhampati and Meredith Myers at the Chronicle of Higher Education unveiled a handy calculator that estimates how many years of minimum wage work it takes to afford tuition and fees at the flagship university in each state. Here in Pennsylvania it would take a minimum-wage worker 2.4 years working 20 hours per week to afford one year at Pennsylvania State University at University Park. That's up from 1.7 years in 1998. Last summer, Nick Malawskey of The Patriot-News/Pennlive.com reported that a year’s tuition at Penn State in 1985 was $2,555, a sum requiring about 38 weeks of work by a minimum-wage worker at the time. It's important to note that Kambhampati and Myers' calculations only include tuition and fees, which are just one part of the cost of attending college. They don’t include room and board, books, supplies and other expenses. At flagship universities, these estimated costs can range from $8,000 to $19,000 a year.

As you can see in the figure below, New Hampshire and Pennsylvania, the only two states in the Northeast that still haven’t raised their minimum wage above $7.25 an hour, stand out as the least affordable states for low-wage workers seeking to pay tuition and fees out of their earnings.

 

The bottom line is that the minimum wage doesn’t have the purchasing power it once did (down 24% from its 1968 peak). That's especially true relative to the rapid increase in college tuition and fees, making them nearly impossible to fund on a low income.  It shouldn't be surprising to learn that low incomes are a substantial barrier to college completion for high-achieving students. What that means in practice is that your physician, your accountant or your boss weren’t necessarily the most gifted and skilled for their position, but the ones with the parents who had the wealth sufficient to finance a degree and the opportunity that came with it.  

Circling back to the state budget, below are the increased funding amounts for higher education in the Wolf and Republican budget proposals (see our factsheets for more comparisons of the Wolf and Republican budgets). In exchange for $44 million in funding for the state system universities, Gov. Wolf secured a pledge from them to freeze tuition. With tuition and fees in state system universities averaging $9,651 a year, those schools are more affordable than Penn State at University Park. Still, at the current minimum wage of $7.25 an hour covering tuition at a state system univerity would require 67 weeks of work, compared to 47 weeks at $10.10 an hour.  Raising the minimum wage while investing more state dollars in higher education to help hold down tuition would work simultaneously on both parts of the affordability problem -- what people can afford and what higher education costs (you can read more about the need to invest in higher education in Pennsylvania here).

 

  Wolf plan Republican plan
Community colleges $15  million $6.5 million
State system universities $44 million $12.4 million
State-related universities $83  million $17.4 million

 

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