Gov. Wolf touts support from academics, economists for $15 minimum wage

By: - March 14, 2019 6:30 am

Gov. Tom Wolf on Wednesday touted a letter signed by nearly 40 economists and academics in support of his proposal to gradually raise Pennsylvania’s minimum wage to $15 an hour.

“This policy would directly lift the wages of nearly 1.5 million workers when fully implemented,” the letter, spearheaded by the left-leaning Keystone Research Center, said. “Another about 500,000 workers whose wages are just above the new minimum would likely see a wage increase through ‘spillover’ effects, as employers adjust their internal wage scales.”

The letter was signed by academics who are either from Pennsylvania or currently live in the state. They teach at schools including Bucknell University, Franklin & Marshall College, the University of Pittsburgh, and West Chester University.

In his most recent budget proposal, Wolf asked the Legislature to raise the minimum wage to $12 an hour effective July 1 and gradually increase the floor to $15 an hour by 2025.

Senate Majority Leader Jake Corman, R-Centre, said at a recent Pennsylvania Press Club luncheon that a $15/hr minimum is off the table, but a “modest increase” is a possibility.

Joan Maya Mazelis, an associate professor of sociology at Rutgers University-Camden who signed the letter, said $15 an hour is a number that’s working well in other parts of the U.S. Neighboring New Jersey is in the process of raising its base wage to that number by 2024.

“That’s what would bring us to a livable wage,” said Mazelis, who lives in Philadelphia.

Pennsylvania’s minimum wage is currently $7.25, a base number set by the federal government. The number of people who make that very low wage in Pennsylvania is falling.

Last year, 96,300 people paid by the hour made minimum wage or less, according to a report from the state Minimum Wage Advisory Board. That number declined by 9.6 percent between 2017 and 2018.

According to the report, 84 percent of people in that group did not have children under the age of 18.

The picture changes, however, when looking at people who make $15 an hour or less.

The Keystone Research Center projects that nearly 60 percent of workers who would be positively affected by a $15 base wage are women while 42 percent are 40 or older. Just under a quarter have children.

“The vast majority of employees who would benefit are adults — disproportionately women — in working families, who work at least 20 hours a week and depend on their earnings to make ends meet,” the letter states.

Ebru Kongar, a professor of economics at Dickinson College in Carlisle, who also signed the letter, said a gradual increase to $15 an hour “strikes a healthy balance between the need to raise wages and the need to minimize the potential disruption for employers.”

She noted that the letter also calls for the minimum wage to be indexed to median wages after 2025. The median wage in Pennsylvania last year was $15, according to the state Advisory Board.

“Once the purchasing power of the minimum wage, which has been eroded over time, is restored, the most rational policy is to make small annual adjustments,” Kongar said in an email. “The long periods between increases slow the growth in wages for low-wage workers and amplify the challenges they face in supporting their families.”

There are also economists in the state who are opposed to raising the minimum wage — or having a minimum wage at all.

A state House committee hosted two of them in February. Susquehanna University’s Matthew Rousu told lawmakers raising the minimum wage to $12 an hour would increase consumer prices by 2.36 percent. The researchers Rousu cited released a statement saying their work had been misrepresented.

Nina Banks, an associate professor of economics at Bucknell University, also signed the letter. She said raising Pennsylvania’s minimum wage would “decrease poverty rates, especially for black and Latino workers since they are more likely to work in minimum wage jobs.”

“Recent studies by the Economic Policy Institute show that states that have raised their minimum wages since 2014 have experienced the greatest wage growth for low-wage workers,” Banks said via email. “Increasing the minimum wage in Pennsylvania would, therefore, help to stimulate the local economy through workers’ increased spending.”

Even if Pennsylvania raises its minimum wage, many workers would still be eligible for state and federal benefits like food stamps and Medicaid.

State Human Services Secretary Teresa Miller recently told the House Appropriations Committee the so-called benefits cliff for a family of three is $50,000. A worker who makes $15 an hour in a full-time job — defined as at least 35 hours a week — has an annual salary of $27,300.

“We as a society are all paying this,” Mazelis said.

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Sarah Anne Hughes
Sarah Anne Hughes

Associate Editor Sarah Anne Hughes covers the governor and Pennsylvania's agencies. Before joining the Capital-Star, she was the state capitol reporter for Billy Penn and The Incline, and a 2018 corps member for Report for America. She was previously managing editor of Washington City Paper, editor-in-chief of DCist, and a national blogger for The Washington Post.