With a Pa. minimum wage bill advancing, some say $9.50 is ‘not enough’ to live on
While Pennsylvania Senate Majority Leader Jake Corman touted the passage of a bill that would raise the state minimum wage for the first time in 13 years as a victory, local activists and workers say the bill doesn’t go far enough to tackle working poverty.
Senate Bill 79, which passed 42-7 in the state Senate Wednesday night, proposes the minimum wage — which has been $7.25 an hour since 2006 — rise to $8 starting July 1, then increase gradually to $9.50 an hour by 2022. It went immediately to the House, which will take up the matter next month at the earliest, the Penn Capital-Star reported.
The bill doesn’t include proposals from Gov. Tom Wolf — backed by labor unions and progressive groups — to eliminate the minimum wage for tipped workers of $2.83 an hour, raise the minimum wage to $15 an hour by 2025, expand overtime eligibility for tens of thousands of workers, tie the minimum wage to the cost of living or end the state’s preemption of municipalities passing their own minimum wage raises.
“I think that this Senate Bill 79 is not a victory for the movement to achieve a living wage in Pennsylvania,” said Manuel Rosaldo, a member of the Centre County Living Wage Justice Coalition and post-doctoral scholar at Penn State’s Center for Global Workers’ Rights. “I think that it’s woefully insufficient. Even once the minimum wage is raised to $9.50 in 2022, that’s still less than $20,000 a year, still a poverty wage.”
Though the $2.25 per hour increase would be a small victory for workers, he said, there is still much more work to be done to achieve the demands that were rejected.
‘Everything’s a compromise’
By 2022, the wage increase would affect 609,000 workers directly and indirectly, or about 10.3% of the state’s workforce, and increase their total incomes by almost $500 million, according to estimates from the progressive think tank Economic Policy Institute.
Corman, R-Benner Township, who helped “negotiate” SB79 with Democrats Wolf and Philadelphia Sen. Christine Tartaglione, said he was “happy” to vote yes. In his remarks in the Senate Wednesday, he praised the compromise that went into passing the bill.
“Everything’s a negotiation,” he said in a phone conversation Thursday evening. “And the governor wanted $12 moving to $15, and we settled at $9.50 which I thought was a fair increase. Everything’s a compromise. You give a little, and you get a little.”
He said the increase puts Pennsylvania in a “competitive area” with its neighboring states, “and it’s a gradual increase. It allows small businesses the ability to phase it in over time so it’s not a shock to their expenses.”
Maryland and New Jersey will increase their minimum wage to $11 an hour on Jan. 1, while New York workers will see a slight increase to $11.80 by Dec. 31 and $12.50 by next December. Ohio’s minimum wage is $8.55 for employers grossing over $299,000 and West Virginia’s minimum wage is at $8.75.
How would Centre County workers be affected?
The possible wage increase comes amid a labor shortage in Centre County caused by low unemployment rates and changing demographics in the area.
“I think what we’re seeing now, and my theory in a location like State College ... there’s a huge demand for products that are produced by individuals with little experience, like the fast food industry, restaurant industry, service industry,” said James Tierney, assistant professor of teaching in the Department of Economics at Penn State.
“But the supply of people that are willing to work those jobs has steadily been declining,” he said. Rather than taking low wage jobs that won’t help them pay their way through school, he said, many Penn State students are choosing to take out loans in hopes their future earnings will help them pay off their schooling. That causes a low supply of labor and high demand, he said.
BEHIND THE STORY
MOREWhy did we report this story?
In late October, we published a story about State College facing its worst worker shortage in decades. The labor shortage has led to temporary closures and concerns for the future, business managers told us. The story explored how the changing Penn State student — those coming from higher-income households — and the increasing flexibility of the gig economy created a “perfect storm” for employers. The story stirred conversation, with readers providing input on other factors for the shortage. One of those, the stagnant minimum wage, took the spotlight last week when the Pennsylvania Senate voted to increase the minimum wage.
Is the proposed $9.50 minimum wage enough? Can it help State College’s worker shortage and Centre County workers who are struggling to make ends meet? Are we missing other factors to these multi-faceted problems? Let us know, and let’s keep the conversation going.
State College resident Evan Zavada, a member of the Centre County Wage Justice Coalition who works as a restaurant server, landscaper and does small engine repair, said the instability of his work hours combined with low pay isn’t sustainable.
But, he said, the nature of low wage work “traps you where you’re at,” to the point where he can’t earn enough to save for relocation costs, like first and last month’s rent.
Would employers feel a strain?
Zavada believes the minimum wage for tipped employees should be “abolished” because it presents an incentive for employers to overschedule the number of servers working and cut people early if work is slow, “effectively lowering the wages for everybody on the shift.”
But Alex Halper, director of government affairs for the Pennsylvania Chamber of Business and Industry, said that since over half of tipped workers work in food and drink establishments, eliminating the tipped minimum wage would hit restaurant employers hard, increasing labor costs by over 500%.
The Chamber, which is the largest business advocacy organization in the commonwealth, fought against Wolf’s proposal to expand overtime on the basis of straining employers and job growth and still has concerns about the minimum wage increase to $9.50.
“We certainly see statewide, wages are increasing, but there are no doubt employers who will be impacted by this increase who will feel strained from it,” Halper said. “We have pushed for this legislation to account for those concerns from employers as much as possible.”
Tierney, citing multiple economic studies on the effect of minimum wage raises on job growth, thinks this “small increase” to the minimum wage won’t have much of an impact on employers or job loss, even in a rural area like Mifflin County. He especially doesn’t expect to see much of an effect in State College, where “most individuals are already making closer to that $8.25, $9 an hour wage” in low experience jobs.
However, he said, a raise to $15 an hour might play out differently. Right now, in the economics profession, the research widely supports the assertion that “as long as that minimum wage stays lower than 75%-80% of the median wage, it’s not going to have as much impact,” he said.
In Centre County, for example, the median wage is about $16-$18 an hour, Tierney said. If half the workers in the entire borough received a raise up to $15 an hour, he said, food and basic living prices would likely go up, which could potentially cancel out the raise.
Yet employer wage theft among low-income workers still occurs in Centre County. According to a 2015 study from Temple University Law School’s Center for Social Justice, there were 4,453 workers in State College across multiple professions including housekeepers, office workers and restaurant staff who experienced minimum wage violations. Of 1.8 million low wage workers in the Pennsylvania, 397,673 experienced minimum wage violations, the study said.
The future of the minimum wage
Zavada said what he makes between his two jobs — serving and landscaping — is “absolutely not” enough to live on in State College.
“The single biggest factor in all this is rent,” he said. “It’s just too high. And obviously with wages being too low, it is a struggle.”
Rosaldo said he was inspired to join in wage activism through his work volunteering at Out of the Cold, where he encountered many working people who utilized the emergency shelter’s services. He also sees many working people frequent the local food banks for basic food needs. He feels the legislature has a responsibility to draft policy that benefits both working people and small businesses.
“Why would you set the minimum wage so low that people couldn’t afford to pay for basic necessities? It doesn’t make sense,” he said.
While labor activists like Rosaldo want to continue pushing for a $15 an hour minimum wage, they might face obstacles in the current state legislature.
“Obviously we always look at the minimum wage,” Corman said. “It’s been 13 years since we raised it the last time. I suspect it will be 13 years before we revisit it again.”
For Zavada, that sentiment is “unconscionable.”
“Working people deserve dignity. People are spending their whole lives ... spending what’s supposed to be their retirements working in these jobs,” he said. “I thought if you work hard in America you should be able to make it, and that’s just not reality for many low-wage workers.”
This story was originally published November 22, 2019 at 4:26 PM.
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