5 things to know about the minimum wage debate in Pa.
HARRISBURG — For a seventh straight year, Gov. Tom Wolf is calling for an increase in Pennsylvania’s minimum wage, which has stayed at $7.25 since 2009 — one of the lowest rates and one of the longest stretches without a hike in the country.
Unlike those previous efforts, though, Wolf does so this time against the backdrop of a historic downturn that has decimated Pennsylvania’s buying power, disproportionately impacted low-wage workers, and driven a similar — albeit so far unsuccessful — “Fight for $15” at the federal level.
But while the context has changed, the arguments against a state minimum wage hike largely have not, as demonstrated by a sometimes contentious state House Commerce Committee hearing convened on Wolf ’s proposal Thursday in Harrisburg.
Testimony about the proposal — Wolf wants incremental increases from $12 per hour on July 1 to $15 per hour in 2027 — focused primarily on the accuracy of lifting-all-boats forecasts, the timing and consequences for pandemic-battered businesses, and the share of the workforce that stands to be impacted.
Here are five things to know about the debate:
Who’s making minimum wage now?
According to statistics provided by the Republican committee chairperson, state Rep. Brad Roae of Crawford County, there are 90,700 minimum wage employees in Pennsylvania, accounting for roughly 1.5% of all jobs in the state, more
than half of those in the restaurant industry.
Matthew Knittel, director of the nonpartisan Independent Fiscal Office, testified that a prior analysis found just over half of Pennsylvania’s minimum wage workers are between the ages of 16 and 24, though the Democratic committee chairperson, state Rep. John Galloway of Bucks County, noted the average age is 35.
Minimum wage workers in Pennsylvania are overwhelmingly women — 77.4% in 2020 — while a disproportionately high share are nonwhite. Black, Hispanic and other nonwhite Pennsylvanians make up 32% of low-wage workers, but just 22% of the state’s population.
What are the potential impacts of a higher minimum in Pennsylvania?
Knittel pointed to a previous study by his office of a proposed $12-an-hour minimum wage increase and said it’s believed it
would benefit 1 million workers directly, grow net wage income for low-wage workers by $2.4 billion, and add roughly $55 million a year to state coffers.
Put another way, income for low-wage workers would increase roughly $34 per week for part-time workers and $55 per week for full-time employees. Hourly tipped employees, many making below federal minimum wage now, would see particularly significant gains.
“Lower wage workers on average spend higher,” Knittel added.
There is also the potential to lose roughly 27,000 new job opportunities, he added, because of a lower rate of turnover. The $12-an-hour minimum wage study also found job hunting may get harder for inexperienced workers, and rural areas with a greater share of small, regional employers may see more negative impacts.
The outlook changes, though, when viewed in the context of this pandemic, simply because of ongoing contractions in the labor market.
“If the minimum wage was raised coming out of the pandemic, we think less people would be helped and less people would be hurt because there are fewer of these jobs currently available,” Knittel added.
An Independent Fiscal Office analysis of the $15-an-hour ceiling in Wolf ’s plan is expected this month or early April.
The gig economy is skewing data slightly.
The movement of younger workers from more traditional industries, like hospitality, to the emerging gig economy is affecting tabulations, Knittel said, accounting for big drops in payroll employees as more take on the label of “independent contractors.”
This matters because independent contractors are not subject to minimum wage protections, minimizing assessments of their overall reach some.
What are the arguments for and against the wage hike in Pennsylvania?
Elizabeth Stelle, a director of policy analysis with the conservative-leaning Commonwealth Foundation, warned that employee benefits and perks could be cut if wages go up.
Stelle also pointed to a drop in the share of Pennsylvania workers earning the minimum wage — though it’s unclear what portion of that owes to the gig economy outmigration Knittel referenced above. Stelle instead urged state lawmakers to focus on providing business owners “regulatory relief ” and liability protection, while removing barriers to new career paths for workers through occupational licensing reform.
Testimony in favor of a wage hike was heard from Mikey Knab, director of RAISE High Road Restaurants, a “national network of restaurant owners who are committed to racial and gender justice.”
Knab said there is clear public support for a minimum wage increase, with 1.7 million Pennsylvanians making less than $15 an hour now. (A new Franklin & Marshall College poll shows 67% of registered voters in the state support raising the wage floor to $12, as Wolf has proposed.)
Knab also echoed Democrats who paint the move as not only a moral obligation but also a macroeconomic strategy that raises disposable income and infuses large amounts of capital into the economy via the lowerwage workers who are less likely to save it.
Does Wolf ’s proposal have any chance of passing?
It’s unlikely given the makeup of the state Legislature. Republican opposition to minimum wage increases has long focused on what raising overhead might force businesses to do to offset those higher payroll costs. Now, in the middle of a pandemic-related recession and pandemic-related business restrictions, they seem even less likely to reconsider.
It’s also a question of how much and how fast. Wolf’s current proposal starts at $12 an hour, while a $9.50-an-hour proposal passed the Senate in 2019 with only seven Republicans
in opposition.
It’s worth noting that Democrats aren’t fully unified on this front either, as the U.S. Senate proved just last week. But that could change.
In Harrisburg on Thursday morning, Commerce Committee member Dianne Herrin, a Chester County Democrat, signaled her own change of heart on the subject following the passage of a $1.9 trillion federal COVID-19 relief plan — signed into law by President Joe Biden on Thursday — that includes billions in small-business support.
“I initially questioned the timing [of the minimum wage increase] with all the COVID-19 impacts going on,” Herrin said. “But the $1.9 trillion relief bill moved me to the position that the timing is now.”
There will still be interparty rancor, though, as proven by Thursday’s hearing. State Rep. Malcolm Kenyatta, D-Philadelphia, pressed Stelle to reveal her own salary and noted that the Commonwealth Foundation’s CEO earns $290,000 a year, per a tax filing. The line of questioning prompted Rep. Rob Mercuri, R-Allegheny, to stand up and walk off the dais. 100% ESSENTIAL: Spotlight PA relies on funding from foundations and readers like you who are committed to accountability journalism that gets results. Become a member today at spotlightpa.org/donate.
With coronavirus vaccines helping turn the tide against the pandemic, Northampton County intends to reopen Gracedale, the state’s largest nursing home facility, to visitors in the weeks ahead.
The facility plans to welcome back vaccinated volunteers April 5, Gracedale administrator Jennifer Stewart-King said Thursday in an interview.
Barring any serious setbacks, family visitations will return May 1. The unveiling comes a day after the CDC and the Centers for Medicare & Medicaid Services released new guidance allowing outsiders into nursing homes if less than 10% of residents have active COVID-19 cases and 70% of residents are vaccinated.
“We’re very excited about this. We knew it was coming,” Stewart-King said.
Gracedale has vaccinated 87% of its residents. There are no active cases among residents, though a staff member is out after testing positive, Stewart-King said.
The news comes a year to the day after Northampton County Executive Lamont McClure announced the
Upper Nazareth Township nursing home would close its doors to visitors and volunteers. At the time, the epicenter of the coronavirus outbreak was centered on a Washington state nursing home that was devastated by the virus. Reports of new cases were only beginning to trickle in across the country.
Since then, Gracedale has seen brief windows for routine visitations, but only if the nursing home went several weeks without a new case. While some small facilities managed to limit the virus’ spread, it’s been a challenge for large nursing homes. Gracedale, with room for nearly 700 residents, has had its share of struggles. Visitors were last allowed before Thanksgiving, Stewart-King said.
The only exception to the visitation rules have been for compassionate care visits.
Over the fall, the state began allowing families to visit their loved ones if they were in hospice or showing signs of emotional distress such as frequently crying or seldom talking.
Visitors should expect some limitations when they do come back. The county is trying to determine how many guests a resident can have at once. Visits initially will take place in common rooms or outdoors.
A year of little contact with the outside world has weighed heavily on residents and staff, Stewart-King said. Interaction with friends and loved ones is critical to seniors’ health and well-being, she said.
While staff members tried to fill the gap, county officials will be relieved to allow guests back on a more permanent basis.
The easing of restrictions will be a relief for staff members as well, Stewart-King said. Many of them limited their own contact with friends and family in an effort not to expose Gracedale residents to the coronavirus. About 48% of staff are vaccinated, she said, but more are expressing interest in getting inoculated after seeing positive results to the first round of shots, she said.
“It is the most important thing we could do to bring happiness back into the nursing home,” she said. “We are very glad we are starting to see the light at the end of the tunnel.”