A BATTLE OVER FIFTEEN
Recent efforts to boost the minimum wage have failed, but the debate rages on
When Andrea Grove opened her Harrisburg coffee shop, she budgeted a salary of $15 an hour for her employees. That hourly rate is more than $7 above the federal and state minimum wage of $7.25 an hour and put Ms. Grove on one side of a yearslong debate about whether the minimum wage should increase and, if so, by how much and how quickly.
Ms. Grove, who opened Elementary Coffee in 2014, ran into some of the problems business owners worry about when discussing a minimum wage increase. The $15 rate may limit the number of employees she can bring on board
and it could prevent her from franchising the business or opening more locations across the state.
But the money she puts toward her employees’ wages will end up paying for itself, she said.
“I think if you put their wages and what they deserve to make first, that will always drive
the budget itself,” Ms. Grove said at a news conference in March. “We’re really just trying to direct the company, as there’s cash flow, back to the employees themselves and back to the people who actually make the company what it is.”
While some employers like Elementary Coffee are already choosing to raise salaries above the minimum wage, so far there has been no mandate from federal or state officials. A provision to raise the federal minimum wage to $15 an hour didn’t make it into the latest COVID-19 relief bill. Still, President Joe Biden and some lawmakers are pledging efforts to make it happen.
In Pennsylvania, Gov. Tom Wolf included a minimum wage increase in his budget proposal, and a group of Democratic lawmakers have pushed for a path to a $15 an hour wage floor. In March, two Republican lawmakers also introduced legislation to raise the minimum wage to $10 an hour.
The state’s minimum wage hasn’t changed in more than a decade, even after several budget proposals and attempts to pass legislation.
Some business owners and economists worry that an increased minimum wage would lead to more job cuts as employers look for ways to fund the extra expense. Advocates for higher pay worry that $7.25 an hour, which amounts to about $15,000 a year for full-time workers, is not enough to live on.
According to one analysis from the Massachusetts Institute of Technology, a living wage for one adult with no children in Allegheny County is $13.11. That factors in expenses like food, housing, transportation and medical bills.
For one adult with one child, it is $26.81.
“I have had to pause and ponder if — due to the extreme challenges the COVID-19 pandemic has thrown at all of us — if it changed the fight for a fair working wage at all,” Ms. Grove said. “And I determined — as a very small business, barely keeping our own heads above water, despite struggling every day to make an income to be distributed among my team — that the only thing that has changed in the fight to raise the minimum wage is the obvious and desperate need to do so.”
“It’s harder to take a risk when you have to start out immediately at $15. Every employer wants to raise their employees’ wages and benefits; it’s just good business. But you have to be able to do it.” Alex Baloga, president and CEO of the Pennsylvania Food Merchants Association
Juggling bills, medical visits
Mr. Wolf’s recent proposal would raise the state’s minimum wage to $12 an hour starting in July, with yearly increases until it hits $15 an hour in 2027. The proposal also aims to eliminate the tipped minimum wage, which guarantees workers $2.83 an hour plus tips.
This is the seventh year in a row Mr. Wolf has introduced similar legislation, which means the target year for $15 an hour continues to get pushed back.
Richard Gegick, 37, of Manchester, said the tipped minimum wage made sense when he started working at a high-end restaurant in Pittsburgh in 2007. Now, 14 years later, it’s not enough to keep up with the cost of living.
“You’re constantly juggling what can you pay and what can you not pay,” he said, adding that he often asks himself which utility bill he can be late on this month. Or, if he can skip out on that doctor’s appointment.
The system makes it nearly impossible for Mr. Gegick to find work that will offer him a higher pay rate in the industry in which he has spent so much time honing his skills. In most industries, a 14-year veteran could ask their boss for a raise. In the restaurant industry, he’s reliant on tips no matter where he goes.
“It doesn’t matter whether you’re working at a diner or a steakhouse, you’re still paid $2.83 an hour,” Mr. Gegick said. “There’s upward mobility in terms of you can work in places with higher-priced menu items and that requires more skill, but there’s no wage competition in the business.”
‘A lot of people work for relatively low wages’
Twenty-nine states and the District of Columbia have a minimum wage that is above the federal rate, including many of Pennsylvania’s neighbors.
About 1.4 million workers in Pennsylvania would be impacted by Mr. Wolf’s proposal to raise the minimum wage to $12 in July, according to a February analysis from the Keystone Research Center and Pennsylvania Budget Policy Center, nonpartisan research organizations based in Harrisburg. The final $15 wage would reach more than 1.6 million people.
Of those, 1.1 million currently earn less than $15 per hour. Another 500,000 people have a salary that is at or close to $15 an hour and would see a bump in their wages as the floor rose, the report found.
“The difference between $8 and $12 or $9 and $12 or let alone $7 and $12 is pretty huge,” said Marc Stier, director of the Pennsylvania
Budget and Policy Center. “Raisingthe minimum wage would lift a lot of people out of poverty.”
A recent report from the nonpartisan Congressional Budget Office concluded that a minimum wage increase to $15 would push 900,000 people nationwide above the poverty line.
That same report estimated it could cost 1.4 million jobs.
Some argue the job loss isn’t worth it. Others argue that the jobs will come back as employees have more spending money to put back into the economy.
The Keystone Research Center estimated the increase would add $6 billion in wages to Pennsylvania workers, which it said translates to $6 billion in new consumption.
But those who oppose the fight for $ 15 aren’t convinced.
“We’ve certainly heard from businesses that if passed into law this would be the final straw and they would have to close up,” said Alex Halper, director of government affairs with the Pennsylvania Chamber of Business and Industry.
“It’s sort of common sense that, yes, there will be people whose wages go up as a result of this policy, but then there are also those who will suffer those negative consequences,” he said.
Employers taking action
Mandate or not, some employers are already moving to raise wages — some stopping short of $15 and others taking a phased-in approach that slowly increases wages each year.
Klavon’s Ice Cream Parlor in the Strip District raised its minimum wage to $15 an hour — plus tips — in March after struggling to find employees to staff the shop as it increased its summer hours.
Best Buy announced last July it would raise its starting minimum wage to $15, bringing its average hourly wages to more than $17, according to a spokesperson for the company. Target made the same move in July, after three years of incremental wage increases. Hobby Lobby surpassed the $15 mark and announced it would raise its minimum wage to $17 an hour last October.
After committing to raise its minimum wage to $15 for all employees in 2018, Amazon received a record number of applications for hourly positions, more than double the previous record, the company said on a call with investors that quarter.
The increased paychecks helped employees with things like car repairs and home improvement projects, Jay Carney, senior vice president for global corporate affairs, wrote in a January 2021 blog post advocating for a federal minimum wage increase. “In short, the investments we made in our hourly employees were quickly transferred to local businesses and economies,” he wrote.
Walmart kept its minimum wage at $11 an hour but introduced raises for 425,000 employees in February that brought its average salary up to $15.25 an hour, according to Anne Hatfield, senior director of global communications. Starting wages for digital and stocking associates now fall between $13 and $19 an hour.
Giant Eagle pays about $26,000 per year for retail sales associates and $24,000 a year for grocery associates, according to job search platform Indeed. For full-time workers, that amounts to about $12.50 an hour for sales associates and $11.50 for grocery associates.
Spokesperson Dan
Donovan said the company has thousands of team members who “have grown in their roles over time and who today receive a wage at or above those currently being proposed.”
Changing the conversation
Members of the Pennsylvania Food Merchants Association, a trade organization that represents independent grocers, supermarkets, convenience stores and wholesalers, have also started to raise wages, according to president and CEO Alex Baloga. But it’s happened on their own terms — and mostly hasn’t reached a $15 rate yet.
Doubling the minimum wage is too steep, Mr. Baloga said. He worries it will make it harder for companies to make new hires.
“It’s harder to take a risk when you have to start out immediately at $15,” he said. “Every employer wants to raise their employees’ wages and benefits; it’s just good business. But you have to be able to do it.”
Instead of a conversation about the wage floor, he wants to talk about the “overall business climate” and get rid of what he sees as outdated rules and regulations that are hampering retailers. As an example, he pointed to the rule that requires stores to have a separate register for alcohol sales.
Mr. Halper from the Pennsylvania Chamber also wants to change the conversation. Rather than a blanket policy to raise wages, he wants to focus on targeted relief for low-income workers.
‘Nobody’s getting rich off $15 an hour’
Wendell Young, president of the United Food and Commercial Workers International Union Local 1776, which represents workers in several industries including in grocery and retail, doesn’t buy it when companies say they’re raising wages to $15 an hour. He often finds that ads for those positions are only for a handful of roles or only offer part-time work or actually require several years with the company before the worker would make that rate.
For workers, that’s not good enough, he said.
“I’m a firm believer that if you can’t afford to pay somebody a wage that is above the poverty level then you shouldn’t be in business,” Mr. Young said.
Workers who are making at or below $15 an hour told the Post-Gazette a higher wage would allow them to start saving money for emergencies, such as a car breakdown. It would allow them to take a day off work or to go back to school.
Nearly a quarter of Pennsylvania workers who would benefit from the minimum wage increase have dependent children, according to the Keystone Research Center.
The $7.25 minimum wage “makes it harder for them to do everything,” Mr. Young said. “Whether it’s buying clothes, making sure their kids have everything they need for school … It affects the kind of housing they can live in.”
“Nobody’s getting rich off $15 an hour,” he said. “Why should anybody in this world, in this country of all places, be expected to work full time at a wage rate that keeps them poor forever?”