Our state is falling behind in wages, while costs keep rising
By The Editorial Board
Some relief to Pennsylvania’s tipped workers came in the form of regulation changes this month.
Now servers who rely on tips no longer have to foot the bill for credit card fees out of their tip money, among other positive changes enacted by Pennsylvania’s Independent Regulatory Review Commission.
That doesn’t change the fact that Pennsylvania’s minimum wage has been stagnant at $7.25 an hour – the lowest amount allowed under federal law – for 13 years.
That means someone working full-time at minimum wage would make just $15,080 a year. The average cost for rent in the commonwealth for a one-bedroom apartment is $855 a month, according to rentdata.org. That leaves less than $5,000 for an individual to live on a year. Renting spaces with multiple bedrooms runs upward of $1,000 each month.
According to a press release from State Rep. Wayne Fontana, the commonwealth is now entering into the longest period without a raise since the minimum wage was enacted in 1938. Thirty states have a minimum wage higher than Pennsylvania’s, with 11 states and Washington D.C. paying their employees $15 an hour or more.
Our state is falling behind in wages, but housing costs keep going up and up.
More than that, with inflation, our dollars are worth less. The federal minimum wage was at its peak purchasing power in 1968, when it was worth $13.68 in value today, according to the U.S. Bureau of Labor and Statistics. If the minimum wage had kept pace with the productivity growth since the late 1960s, it would be more than $24 per hour today in Pennsylvania, according to Fontana.
Raising the minimum wage would help many, many people, not just those directly impacted. It would reduce the need for public assistance, create more opportunity for low wage workers to build up their savings in case of emergency and afford health care.
Of course, the downside is that small businesses would have higher expenses. According to a report by American Progress.org; “Economic literature has found that increases in worker productivity, reductions in turnover, and aggregate increases in consumer spending offset a large portion of the increased payroll costs.”
Not having to pay to train new workers is definitely a cost-benefit. Also, studies have shown that lower-income workers put more of their wealth back into their communities immediately by spending. People who are less worried, and do not have to work side hustles to make ends meet are more dedicated, too.
All in all, we think Pennsylvania’s minimum wage should go up.