Pennsylvania urged to raise minimum wage

Advocates state case to legislators

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HARRISBURG -- Ask Marquis Foster, a baggage handler at Philadelphia International Airport, what a bump in the minimum wage would mean for his bottom line and he is unequivocal.

"It would help a lot ... it would help me buying food and gas," said Mr. Foster, 21, who lives with his mother in Philadelphia and commutes twice a day to work two split shifts at the airport.

Nationally, Democrats are pushing the issue of raising the minimum wage -- a politically popular cause in an election year. In Pennsylvania, it's no different.

A coalition of labor leaders, religious groups and other activists gathered in the state Capitol last week to announce it intends to push for legislation to raise the state's minimum wage from $7.25 an hour to $10.10.

"If we are serious about growing this economy, it's simple economics," said Rick Bloomingdale, president of the Pennsylvania AFL-CIO. "And even Henry Ford, who was not the most union-friendly guy in the world, understood that you had to pay your workers a decent wage so that they could buy his car, so that he could make money."

There are 21 states with a higher minimum wage than Pennsylvania, including several adjacent states, such as New York and New Jersey.

Republican Gov. Tom Corbett has expressed concerns about such an increase, and a host of business groups stand in opposition, saying it would hurt small businesses, mean fewer people would ultimately be hired and that many minimum wage workers aren't supporting families.

"Some people will get a raise. ... But you're giving that at the expense of other people," said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.

Even a small increase represents "tens of thousands of dollars for a small-business owner to have to find somewhere," said Melissa Bova, a lobbyist for the Pennsylvania Restaurant & Lodging Association.

PG graphic:Minimum wage workers in Pa.
(Click image for larger version)

Among economists, no consensus exists on whether a modest increase in the wage would cause job losses or not, said James Craft, a professor at the Katz Graduate School of Business at the University of Pittsburgh.

But what's certain is the value of the minimum wage continues to erode and lose purchasing power due to inflation. Raising it could boost consumer spending, he said, and "it might well have a modest, if not meaningful, effect on consumption."

However, such a raise could also lead to increased automation in certain service jobs, such as replacing fast food workers or waitstaff with touch screens customers use to order, which could ultimately hurt employment. "It's really an up-for-grabs situation in terms of the clear economic impact," he said.

Raising the wage won't change broader, structural problems in the economy and in labor markets, said Lowell J. Taylor, a professor of economics at the Heinz College at Carnegie Mellon University. "It really doesn't impact the big problem," such as stagnating wages for workers, especially those with moderate skill levels.

Other economists have suggested there are better ways to aid the working poor, such as with the more targeted Earned Income Tax Credit, which would solely aid low-income workers and not, for instance, the teens from upper-income families who would also benefit from raising the minimum wage.

Broad support for a raise

Still, raising the base wage is a popular proposal. A Quinnipiac University poll in February found broad support for it in the state. The poll found 38 percent of Pennsylvania voters would support increasing the minimum wage to $10.10 an hour, 16 percent support increasing it to something less than $10.10, 14 percent support increasing it to more than $10.10.

Twenty-eight percent of voters were opposed to any increase.

Results are similar in other states, said Tim Malloy, assistant director of Quinnipiac's Polling Institute. "A pretty large majority of Americans believe the minimum wage is too low."

There tends to be support for raising the wage among independents and moderate Republicans, as well as among Democrats, said Chris Borick, a professor of political science and director of the Muhlenberg College Institute of Public Opinion in Allentown.

There are several reasons why, Mr. Borick said. It's a policy issue that's easy for the average person to understand, it rewards working and isn't viewed as "welfare," and the wage hasn't increased in a number of years. "With income disparity becoming a bigger and bigger concern in the general public, this seems like a practical policy tool. ... It's a good political issue for Democrats."

Democrats from President Barack Obama to members of Congress and candidates for governor of Pennsylvania have been campaigning for an increase. Gubernatorial candidate and state Treasurer Rob McCord has called for the highest wage increase, to $10.70 an hour.

In 2012, the full-time annual income for a person in Pennsylvania making the minimum wage was $15,080 or just above the 2012 federal poverty threshold for a two-person household ($14,937), according to a state report released earlier this month about the minimum wage in Pennsylvania.

"If the minimum wage remains unchanged at $7.25 in 2014, the earnings of an individual working full time at that wage almost certainly will dip below 100 percent of the federal poverty threshold for a two-person household," the report stated.

In Pennsylvania, the General Assembly last voted to raise the state minimum wage in 2006, from $5.15 an hour to $6.25 effective Jan. 1, 2007, and to $7.15 in July 2007. In 2009, the federal minimum wage increased from $6.55 an hour to $7.25, which also increased the wage in Pennsylvania.

In 2013, there were 190,800 Pennsylvania workers earning minimum wage or below, according to the most recent statistics available from the state Department of Labor & Industry. Demographically, these workers tend to be more female (65 percent are women), younger (58 percent are under age 25) and less educated (60 percent have a high school diploma or less) than the workforce at large. State statistics also show 81 percent have no children, and 19 percent of minimum wage workers have at least one child.

Increasing the wage, especially to $10.10, could lift the wages of as many as more than 1 million Pennsylvania workers. However, said Mark Price, a labor economist at the left-leaning Keystone Research Center, it would impact not just those at minimum wage level, but could ripple upward, impacting those making a few dollars above the minimum wage level as well.

Mr. Price said such increases do not automatically result in job losses because employers absorb the change in different ways.

"A rise in wages can lead some employers to raise prices, it can mean lower profits, it can lead to a boost in productivity, it can lead to a reduction in other costs like the costs associated with training thanks to lower employee turnover," he said.

There are multiple minimum wage proposals in both the state House and Senate, though they vary by amount and how quickly they would take effect.

A news conference last week highlighted two bills from state Sen. Christine Tartaglione, D-Philadelphia. Her legislation would increase the wage to $10.10 an hour, provide an automatic cost-of-living adjustment, eliminate the separate minimum wage for tipped workers (currently $2.83 an hour), allow municipalities to set their own minimum wage and increase fines for employers who engage in "wage theft."

With Republicans controlling both the state House and Senate, a bump in the state's minimum wage seems unlikely, at least any time soon. The issue is not a legislative priority between now and June 30 -- when the state must pass its budget -- said Senate Majority Leader Dominic Pileggi.

However, when the General Assembly last voted to raise the wage, in 2006, both chambers were Republican-controlled, as they are now.

"It is a national discussion that members of our caucus are following closely," Mr. Pileggi said. "Certainly, every few years, this issue comes up."

Kate Giammarise: 717-787-4254 or or on Twitter @KateGiammarise.

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