Minimum wage debate persists in Pennsylvania

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(The Center Square) – The House Democratic Policy Committee issued a call to action this week during a hearing on raising the minimum wage at SEIU Local 668 in Philadelphia.

“Increasing the minimum wage will reduce poverty, promote economic growth, and provide a sense of financial security to workers,” said Rep. Roni Green, D-Philadelphia. She noted that the current minimum wage, $7.25 per hour, was established in 2009 following efforts by the labor movement.

Each of the states bordering Pennsylvania has a higher rate, while the commonwealth still mirrors the federal minimum. This makes Pennsylvania among the 20 states tied for the lowest minimum wage in the country.

Federal data shows just under 64,000 residents make $7.25 or less an hour and nearly three-quarters of those include tipped workers. Another 418,000 make up to $12 an hour, and 510,000 earn between $12 and $15 per hour.

Further, the number of “at-or-below” workers declined more than 40% between 2017 and 2022 – largely due to the pandemic-induced labor shortage.

The Keystone Research Center said one in four workers would benefit from a $15 minimum wage, which would boost annual earnings by an average of $4,300.

Most of those workers, according to the center, include women between the ages of 20 and 39 and people of color, while 18% are over the age of 55.

Critics of the policy argue that businesses will cut positions or reduce hours to cover the cost of wage mandates, erasing its economic benefits for workers. A recent analysis from the Independent Fiscal Office found that a $12 an hour rate could cost Pennsylvania 5,000 jobs.

In post-pandemic economy, however, soaring inflation has only made matters worse.

Kareem Jones, a homecare worker in Philadelphia, said during an emotional testimony on Wednesday that caring for his brother that what first began as providing practical assistance grew into a full-time job.

He’s received training and compensation for the work, but the wage is not enough for him to survive and he doesn’t have any benefits. As a result, he takes on gig work like Instacart to supplement.

“I’m always struck by the argument from the other side that oh minimum wage jobs, it’s teenagers after school,” said Rep. Paul Friel, D-Pottstown, moved by Jones’ account. “What value do we place on the people that we take care of?”

Envisioning the services from the state that would be required in the absence of workers like Jones, Friel added, “It ends up costing more than if we just paid a living wage to begin with.”

Rep. Ismail Smith-Wade-El, D-Lancaster, said workers like Jones receive their funding from the state.

“You are working for the Commonwealth of Pennsylvania under the regulations of the Commonwealth of Pennsylvania, and at the same time we’re telling you that we want to pay you less so that we can save a buck up front,” he said.

Human services like health and home care workers are not the only demographic facing lower than liveable wages. Those working within the service industry have been hit hard by economic forces.

Marc Stier of the Pennsylvania Policy Center recalled his own experience in the service industry in 1968. At the time, the minimum wage was $1.60. Adjusted for both inflation and productivity, which have risen disproportionately, this is equivalent to at least $23. Accounting for inflation alone would set the bar at over $31 per hour.

“Just like a right to form unions, the social safety net, and a tax system that asks the rich to pay more than the poor, these policies ensure that our economy works for all of us, not just the wealthy owners of large corporations,” said Stier.

Stier spoke at a hearing in 2023 before the House passed a proposal that would incrementally raise the minimum wage to $15 by 2026 and tie the number to inflation in order to prevent the kind of stagnation the state has seen over the past several years. It’s an idea Gov. Josh Shapiro said he supports, too.

The proposal faces long odds in the Republican-controlled Senate, however, at least one has already cosigned the idea, as The Center Square previously reported. Still, it will be a heavy lift.

House Bill 1500 would also increase the tipped minimum wage to 60% of the minimum wage in an effort to offer more consistency and security for those in the service industry who traditionally rely on tips in order to make ends meet, according to its supporters.

Barista Bree Golfin provided a candid and broad-ranging testimony that stirred the representatives present. She said that today’s tipping system is historically rooted in racism, creating situations where employers aren’t required to pay employees. Furthermore, servers’ wages are at the mercy of restaurant traffic, and the public, she says, is far from equitable in its distribution of tips.

In her experience, it is often employees who are new to the industry, people of color and those who don’t meet “traditional beauty standards” who lose out on tips. She added that many within the service industry are forced to take on unsafe “non-traditional means of income” to fill the gap.

She described difficult work environments and circumstances in which employees aren’t paid overtime and aren’t provided security after working late hours in dangerous neighborhoods. During her testimony, she apologized for being “all over the place” after losing sleep working till 1 a.m. the night before.

Speaking about organizations and community initiatives aimed at creating structures of support in lieu of adequate legislation, Golfin noted, “there’s only so much that one organization can do.”