KRC Reports in Small Bites: The Minimum Wage Report 2018: Post 4 of 6

We write a lot and that makes it hard to find the time to catch up on our latest research. To make our work easier to digest in 2018 we are breaking reports up into smaller bite size pieces and posting them here. This post is the fifth in a series of six highlighting key findings from our latest report The Pennsylvania Minimum Wage in 2018. Netflix down? Can't read another grim news story? You can binge on the full report here. Or take it slow and read the first, second, and third post in this series.

The failure to raise the minimum wage in Pennsylvania has cost low-wage workers hundreds of millions of dollars in lost wages.  Not surprisingly, the long-term erosion of the purchasing power of the minimum wage has led to campaigns across the country to raise local and state minimum wages.

These campaigns were invigorated after a wave of strikes at fast food restaurants for a $15 minimum wage inspired activists around the country to raise their own demands. Prominently, the city of Seattle, followed by New York state and California, all enacted legislation putting them on a road to a $15 minimum wage. The national campaign to raise the minimum wage moved from a demand of $10.10, which would restore the purchasing power lost since 1968, to an increase to $12 by 2020 and to $15 by 2024.

Although there is bipartisan support for a higher minimum wage in Pennsylvania, with bills introduced by both Republicans and Democrats, it has been more than a decade since legislation to raise the minimum wage has moved to the floor of the state House or state Senate for an up or down vote. 

The legislation proposed in Pennsylvania includes minimums that range from $8.75 to $15. We present here a simplified schedule of increases that lift the minimum wage $1.75 (24%) to $9 next July and then raise the minimum wage annually by $1 until it reaches $15 by 2024.  Although the timing of a minimum wage increase matters for both workers and employers and varies widely in proposed legislation, the table below provides a useful guide in comparing the number of workers affected by the different proposals circulating in Harrisburg.

David Cooper and Janelle Jones of the Economic Policy Institute estimate an increase in the minimum wage to $9 by July 2018 would raise the wages of 791,000 Pennsylvania workers (403,000 directly and another 388,000 indirectly), which is 13.8% of the workforce. Raising the minimum wage to $12 would raise the wages of just over twice as many workers, 1.6 million, or 28.9% of the workforce. Raising the minimum wage to $15 would lift the earnings of roughly 2.2 million workers, which is 37% of the Pennsylvania workforce. In terms of the cumulative increase in wages for all affected workers, a $9 minimum wage would boost annual wages by $894 million, a $12 minimum wage would increase total earnings by $3.9 billion and a $15 minimum wage increase total earnings by $9.1 billion. 

The majority of workers in Pennsylvania that would get a raise if the minimum wage were increased to $9 this July are adults (80.6%) working 20 or more hours a week (75%) with a family income less than $75,000 (67.8%). To view the demographic characteristics of the workers affected by a minimum wage increase to $9, $12 and $15 download this table.

In our next post in this series we will discuss the importance of eliminating subminimum wages, local preemption and reducing wage theft.


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