Pennsylvania is one of the only states in the Northeastern U.S. to have gone the past few years without raising its minimum wage even slightly. Instead, the Keystone State still adheres to the federal level of just $7.25 per hour even as its neighbors have largely surged toward $15, but in the past few months it has become increasingly apparent that the pressure for an increase is mounting.
During a late-February hearing in the state's House of Representatives, Pennsylvania Labor & Industry Secretary Gerard Oleksiak said it was "embarrassing" that Pennsylvania's minimum wage remains in line with the federal level, according to the Pennsylvania Capital Star. That leaves the state's lowest-paid workers earning less than half of what their counterparts across the border in New York and New Jersey make, but Gov. Tom Wolf is once again calling for the number to rise to that $15 level and, going forward, tying the number to the rate of inflation.
Currently, Oleksiak estimates that some 2 million state residents would get a raise as a direct result of an increase to even $12 per hour, let alone $15, the report said. Furthermore, he noted that estimates for the actual living wage in the state is closer to $20 an hour; as such, any growth would go a long way toward helping millions of people live more comfortably.
What's going on?
Last year, there was an attempt in the legislature to pass a compromise bill that would have raised Pennsylvania's minimum wage to $9.50 over the course of two years, but it stalled in the House after passing the Senate, according to the New Castle News. In the wake of that, Wolf's new proposed increase would raise the minimum sharply as of July 1 - to $12 per hour - and then rise by 50 cents per year through 2026.
"Forcing people who work full-time to get by on $15,000 a year doesn't just limit what they can build for themselves and their families," Wolf said in his February budget address. "It limits what they can contribute to our shared prosperity. That's why 21 states have already increased their minimum wage this year alone. Nobody out-works the people of Pennsylvania - they deserve the same fair wage."
In addition, Wolf wants to raise the wage at which salaried employees are eligible for overtime, from the current $35,568 to $45,000 in the next two years, the report said.
The financial case
While an increase in the minimum wage would be a financial boon for many workers, the state itself would also benefit, according to Jacqui Rogers, a minimum wage specialist, writing for the Doylestown Itelligencer. Estimates show the state budget would rise by as much as $170 million through a combination of people paying more in taxes and the reduced burden on the state's public assistance programs.
Given the growing momentum behind such an increase, it would be wise for companies in Pennsylvania - and beyond - to start offering employees higher pay and stronger benefits packages. Doing so helps companies stay competitive and retain talent in the long run.