Look around. Our neighbors to the north, east, west and south each have something that the Keystone state does not.
That would be a higher minimum wage than Pennsylvania.
Last increased in 2009, the Commonwealth’s minimum wage continues to languish at $7.25 with proponents and opponents to an increase still fighting after a decade and a half.
The Keystone Research Center (KRC), a leading economic think tank, has decided to enter the squabble between factions with facts, releasing a new report titled “Who Benefits? The Demographic Impact of a Minimum Wage Increase in Pennsylvania.” The report sheds light on the powerful benefits that increasing the minimum wage to $15 per hour by 2026 would deliver to workers across the state.
“Today’s $7.25 per hour minimum wage in Pennsylvania is simply not enough to ensure that workers can provide for themselves and their families,” said Stephen Herzenberg, Executive Director at Keystone Research Center. “Raising the minimum wage to $15 per hour by 2026 would not only improve the lives of millions of workers but also lead to a stronger and more equitable economy.”
In June, Pennsylvania’s Democratic-held House of Representatives passed House Bill 1500, a bill that would raise the minimum wage to $15 per hour by 2026. HB 1500 aimed to raise Pennsylvania’s tipped minimum wage to 60 percent of the minimum and put the minimum wage on a schedule to increase to $11 per hour on January 1, 2024, $13 on January 1, 2025, and $15 on January 1, 2026, indexed to inflation afterwards.
By the close of 2023, the Pennsylvania Senate did not hold a floor vote on the corresponding Senate bill or advance any minimum wage legislation.
“We’re losing workers, because they’re going across the border to get a living wage,” said Herzenberg. “And none of the workers in those states (paying a higher minimum wage) are coming across the border to get a Pennsylvania poverty wage job. So this is a very popular issue.”
Research from the KRC shows that over 1.3 million workers in Pennsylvania would see their wages increase if the minimum wage is raised to $15 per hour. The group says that this would not only reduce poverty rates but also help decrease gender and race pay disparities, while also directly benefitting a higher proportion of rural workers.
The report indicates that five out of every six workers (84%) who would benefit from a proposed $15 by 2026 are adults 20 and over – not teenagers as is often argued – and many have significant work experience. Over half of those who would benefit are between 20 and 39 years old, and a considerable number of those who would benefit (37%) have at least some education beyond high school.
It’s not just the under-40 crowd that would benefit, as workers across many industries would stand to benefit from the proposed minimum wage increase. The educational services, healthcare, and social assistance sectors, which have shouldered a disproportionate burden during the COVID-19 pandemic, would see 25 percent of their workers benefit from the wage hike. Additionally, 26% of workers in the wholesale and retail trade industry, where nearly 1 in 4 workers earn less than $15 per hour, would experience a positive impact.
“I was visiting a nonprofit and I saw some older adults, older workers working doing like desk work,” said Rep. Patty Kim (D-Dauphin). “Who are you employed with? And how much are you making? And they said that they’re a part of the Senior Community Services Employment Program, and that they’re making $7.25 an hour. I was shocked and the looks on their faces that they are making $7.25 is of embarrassment and the body language was, it’s not enough. But this is what we have to do to make ends meet. I’m proud to support House Bill 1500 along with my colleagues. Now it’s up to the Senate to do the right thing.”
“It’s important for working families to know that they have lawmakers in Harrisburg that are looking out for them,” said Rep. Dave Madsen (D-Dauphin). “They have a state House that’s advocating for them as well and some friends in the Senate that want to see wages go up. This report makes it clear that whether we should raise the minimum wage in Pennsylvania should no longer be a question.”
KRC’s report emphasizes that raising the minimum wage is long overdue. Since 2009, the minimum wage in Pennsylvania has remained stagnant at $7.25 per hour due to legislative inaction. This failure to keep up with inflation has led to a decline in purchasing power for low-wage workers, particularly more family’s most essential needs such as housing, gasoline, and education.
“The fact that it’s now 15 years since the General Assembly raised the Pennsylvania minimum wage is a case of legislative malpractice,” said Rep. Justin Fleming (D-Dauphin County). “Meanwhile, our neighboring states’ lawmakers have taken action to ensure their workers are paid enough to make ends meet. We must pass HB 1500 this year – hard-working families across the Commonwealth cannot wait any longer.”
The report also highlights that increasing the minimum wage to $15 per hour by 2026 would inject more money into Pennsylvania’s economy. Low-wage workers often spend all of their increased income and do so where they live, providing a boost to local businesses and communities. By linking future wage adjustments to inflation, the report argues that Pennsylvania’s workers would no longer face the same stagnant wages in the future.
“Raising the minimum wage is not just about increasing income; it’s about creating a strong foundation for working families to thrive,” said Angela Valvano, Executive Director of Better PA. “It is part of a comprehensive policy agenda that includes fair taxation, quality education, and economic empowerment for working families.”
Some employers have talked about a ‘ripple effect,’ that wages for other workers will have to rise to account for the minimum wage being raised.
“Economic modeling does show that some workers earning more than exactly $15 per hour would expect to see a slight wage increase as the minimum wage rises to $15 per hour,” said Claire Kovach, senior research analyst for KRC. “That economic modeling largely predicts that ripple effect out to about $17.25. Sometimes it’s around $18, but certainly not much higher than that modeling use in our report.”
Herzenberg added, “That’s a good thing. That was one of the reasons that 1.34 million workers will benefit statewide is because of that ripple effect.”
To emphasize the report and its potential impact, the KRC also released fact sheets that reflect how many Pennsylvania workers would benefit from a $15 per hour minimum wage by 2026 for each county and each legislative district.