January 10, 2024
Dan Rainville/USA Today Network
Despite raises to the minimum wage in 22 states this year, Pennsylvania's still sits at $7.25 per hour. Above, the Pennsylvania State Capitol in Harrisburg.
It's been almost 15 years since Pennsylvania saw an upgrade to its minimum wage, when the federal government set its rate of $7.25 per hour in 2009. Meanwhile, residents of 22 other states — including Delaware, Maryland, New Jersey, New York and Ohio, which border Pennsylvania — saw their minimum wages increase in the new year.
But that's not for a lack of trying. In June, the Pennsylvania House passed a bill that would have bumped the minimum wage to $11 an hour. A similar bill was introduced in the state Senate, but nothing was approved in time for a change in January. Senate President Pro Tempore Kim Ward told reporters last week that raising the minimum wage is on the table for this year’s legislative session but did not give specifics about when or how much the raise could be.
Still, Jeff Hornstein, executive director of the Economy League of Greater Philadelphia, a think tank, doesn’t have high hopes.
"As long as the Senate is completely controlled by a political party that doesn't have its finger on the pulse of economic reality, (an increase) is never going to get to the governor's desk," Hornstein said.
Chellie Cameron, president of the Greater Philadelphia Chamber of Commerce, said minimum wage increases in bordering states severely affect Pennsylvania's job competitiveness.
"For our economy to truly thrive, it is imperative that (Pennsylvania) residents have access to jobs that provide good-paying wages," Cameron said.
About 60,000 workers in Pennsylvania — or 2% of hourly workers — earn the minimum wage or less, according to a 2022 report from the state's Department of Labor and Industry. That percentage is higher than the 1.3% of U.S. hourly workers who make minimum wage or less. According to Hornstein’s estimates, unemployment is at about 3.5% in Pennsylvania, meaning the state is nearly a fully employed economy.
At the same time, Pennsylvania is the 14th most unionized state in the nation, according to the Bureau of Labor Statistics. Hornstein noted that every janitor in the Greater Philadelphia area makes $20 per hour because of unions, and that unions can help drive wages up even for non-unionized workers as employers have to stay competitive.
Hornstein predicts that 2024 will see continued pushes from unions to increase wages with or without a minimum wage boost.
"We're going to see workers continuing to organize, and this is the right time to do it because corporate profits are high (and) unemployment is very low," Hornstein said.
At the city level, Philadelphia isn't allowed to set a citywide minimum wage due to Pennsylvania's Minimum Wage Act, which sets the minimum wage and overtime rates for employees. But current city legislation requires that any job driven by city funds pay 1 1/2 times the state minimum wage, meaning city employees and workers hired for city projects by contractors and subcontractors must make at least $10.88 per hour.
Last year, Councilmembers Mike Driscoll and Jim Harrity introduced a bill urging the General Assembly to put forth legislation allowing Philadelphia to set its own minimum wage separate from the state.
Even if this is the year for statewide change, it would need to be drastic to match the cost of living in Philadelphia. According to the MIT Living Wage Calculator, an adult with no children in Philadelphia County needs to make $17.53 an hour to support themselves, and for an adult with two children, the amount is $48.10 per hour. While campaigning, new Philadelphia Mayor Cherelle Parker said she wanted a $17.53 per hour minimum wage in the city.
Though Pennsylvania's minimum wage only impacts a small percentage of workers, it sets the tone for many others. With a floor of $7.25, paying just a few more dollars per hour could be considered competitive.
Some private companies are taking wage matters into their own hands. Workers at McDonald's locations in Pennsylvania make, on average, $12.50 an hour. The national average wage for Walmart employees is over $17.50 per hour. Amazon pays, on average, more than $20.50 per hour nationally. Because many federal and state governments aren't raising the hourly wage, Hornstein said, employers are doing it themselves to stay competitive in a tight labor market.
"The idea that we're even talking about $7.25 is laughable," Hornstein said. "We should be talking about raising the minimum wage from $15 to $20 an hour."
