Billy Penn in Harrisburg

Pennsylvania’s minimum wage is $7.25 an hour. Does it need to change?

Gov. Wolf and the Dems say yes. Here’s what the numbers say.

A rally to raise the minimum wage at the City County Portico in Downtown Pittsburgh.

A rally to raise the minimum wage at the City County Portico in Downtown Pittsburgh.

Jasmine Goldband
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In each of his budgets since taking office, Gov. Tom Wolf has proposed an increase to Pennsylvania’s minimum wage. And each year he’s been rebuffed by the Republican-controlled legislature.

But that doesn’t mean Wolf and the Democrats are going to let the issue go.

The governor recently used his limited authority to raise the minimum wage for some state workers and contractors to $12 an hour, the number he wants the General Assembly to adopt for the whole state. It’s a proposal favored by a majority of voters that would mean higher wages for more than one million Pennsylvania workers.

There is some bipartisan support for moving beyond the $7.25 federal minimum wage. Republican candidate for governor Scott Wagner said at a July town hall he supports an increase to $9.50 or $9.75 an hour, and some GOP state legislators, including Philly’s Tom Murt, have signed on to minimum wage bills.

To raise the minimum wage for workers anywhere in the commonwealth, the Pennsylvania House and Senate must pass a bill the governor will sign.

Not even “city of the first class” Philadelphia is able to raise its own minimum wage, thanks to a 2006 bill. That legislation, signed by then-Governor Ed Rendell, gradually raised Pennsylvania’s minimum wage from $5.15 an hour to $7.15 — but it also included language preempting “any local ordinance or rule concerning the subject matter of this act.” Two years after Pennsylvania’s wage reached $7.15, the federal minimum was set 10 cents higher.

That’s where it’s been for nearly a decade. Over the same period, the U.S. has come out of a recession and wages have grown overall in Pennsylvania.

The big question: Are they growing fast enough for everyone?

A growing economy, but for whom?

Last year, 106,500 of Pennsylvania’s more than six million workers made minimum wage or less. That number fell by 88,000 between 2012 and 2017 as the labor market improved and the average wage paid in the commonwealth increased, a state advisory committee wrote in March.

Wolf has said that Pennsylvania workers haven’t gotten a raise in nearly a decade, which isn’t strictly true. The state’s Independent Fiscal Office, which is tasked with providing nonpartisan revenue projections to the General Assembly, reports that wages have grown an average 3.3 percent annually since the recession ended. IFO is projecting even higher wage growth for 2018 and 2019.

However, wage growth can be a difficult thing to calculate, said IFO Director Matthew Knittel, “because if you do it appropriately it takes a lot of complex data to do it right.” One of the biggest issues is deciding on a measure. IFO uses withholding tax information because it’s “real-time and reliable.”

The 3.3 percent growth number IFO presents doesn’t account for some other factors that could be relevant, Knittel said. The rate falls to 2.5 percent annually when you factor in overall growth of the workforce, and goes down even more when accounting for the change in Consumer Price Index — all the way to 0.9 percent.

Also, the growth number is an average that takes into account all workers, so it’s tough to say who’s actually benefiting.

“The actual growth rates for those at the top end of the income spectrum could be very different from those on the lower end,” Knittel clarified. “The difficulty is those individuals will change over time, and I am not aware of a study that matches PA workers over time to trace how their income increases/decreases.”

Perhaps the best easily available source of wage data comes from the Census Bureau’s Current Population Survey. The left-leaning Keystone Research Center crunched those numbers and found some wage growth for most Pennsylvania earners between the second half of 2016 and first half of 2017 — which makes sense considering the falling unemployment rate, Keystone labor economist Mark Price said.

But if you factor in inflation, there’s been a decline in real hourly wages for lower and middle-income workers over a nine-year period, per Keystone’s analysis. Only the state’s top earners saw their wages grow by more than 4 percent during that period.

So while it’s true that wages have grown in Pennsylvania over the past decade, the distribution has been uneven, Price said.

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Jasmine Goldband

Higher wages = fewer jobs?

House Speaker Mike Turzai is among many conservatives who oppose a minimum wage increase. Their argument against the boost? That it would eliminate thousands of jobs.

In an interview with KDKA this June, Turzai said increasing base wages has had “devastating effects” in places like Seattle. He also cited an April analysis from the IFO that found increasing the minimum wage gradually to $12 an hour would lead to an estimated 33,000 job losses.

A working paper released in 2017 by the University of Washington did find Seattle’s minimum wage law caused a reduction in hours and jobs for low-income workers. But since its publication, experts have criticized that study for its limited scope, methodological issues, and lack of peer review.

A more recent study of 137 minimum wage increases found “the decline in jobs paying less than the new minimum wage is offset by an increase in those paying more,” the Washington Post reported.

Nathan Benefield, vice president of the conservative Commonwealth Foundation, argues that government-mandated wage floors shouldn’t exist at all, as they “[bar] anyone who’s not producing that amount of value from getting those jobs.” At the same time, Benefield said Pennsylvania “wouldn’t see that big of a ripple” if the minimum wage went to around $9 because of the wage growth the state has seen.

Still, if the minimum wage increases, businesses that pay employees on that level “are going to find a way to make up that money,” he said. That could include cutting back on hiring.

The Keystone Research Center doesn’t think that will happen.

Pennsylvania is surrounded by states with a higher minimum wage — from $8.25 in Delaware to $13.25 in D.C. — and wage growth is better in those jurisdictions than in Pennsylvania among low-income workers, per the center’s analysis. Those states have also seen stronger overall employment growth, with the exception of West Virginia.

Reality check: Republicans control the legislature

While there is some bipartisan support for raising the minimum wage, it’s primarily Democrats in the state House and Senate who are pushing these proposals.

That’s not great news for backers of an increase — including Wolf — considering both chambers are controlled by Republicans who decide which pieces of legislation live and die.

Here’s a rundown of some of the pending bills and how they would increase the minimum wage in Pennsylvania:

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