User:Neonviper7/Minimum wage in Pennsylvania

Early Wage Adjustment

A act was proposed in 1913 alongside other pieces of legislation related to child and female labor. This bill looked to establish a three person board called the Wage Commission of the Commonwealth of Pennsylvania to investigate industries and determine what the appropriate minimum wage should be. This wage would be enforced and women and children would be paid at a rate less than this wage.

Active Legislation

The Minimum Wage Act of 1968 established the first state minimum wage at a rate of $2.65 that went into effect immediately. This held for about a decade until the raises to $2.90 and $3.10 on January 1 of 1979 and 1980. It was again raised to $3.35 an hour on the last day of 1980. The minimum wage was raised to $3.70 an hour on February 1st of 1989. Eight years later a large increase to $5.15 an hour went into effect on September 1st, 1997. Governor Ed Rendell championed the latest increase in the Commonwealth’s hourly wage rate. It increased to $6.25 an hour starting on the first day of the year in January of 2007 and then increased again to $7.15 an hour on July 1st, 2007. At this time the federal minimum wage was $5.15 an hour so the new PA rate was an increase that affected the wage workers earned. However, since July 24, 2009 the federal minimum wage has been $7.25 an hour so this is the current effective minimum wage in Pennsylvania.

Controversies

A state-mandated minimum wage is a highly debated issue. Currently, Pennsylvania does not mandate a minimum wage, which means that the federal minimum wage of $7.25 per hour is the standard for the Commonwealth of Pennsylvania. The federal minimum wage was first instituted by the Fair Labor Standards Act of 1938, a Depression-era law intended to improve the economic welfare of lower-class workers. The current minimum wage came into effect on July 24, 2009.

Critics of a minimum wage in Pennsylvania argue that a price floor in labor markets leads to unemployment if the value of labor per hour is less than the per hour wage. Some economists believe that the macroeconomic benefits are outweighed by the costs, as more workers are likely to be laid off than given a raise.  In many cases of a higher minimum wage, employers will lay off the minimum wage employees and transfer their duties to more productive, better-paid employees. In the city of Seattle, a 2015 increase from $9.47 per hour to $11 per hour had little effect on overall pay raises, with a rise of 3%. In some situations, an employer may leave the state or country entirely in search of lower labor costs in areas that don’t mandate a minimum wage.  There are also concerns that the minimum wage is not as concentrated on the poorest households as was originally intended. The share of households with at least one minimum wage worker is nearly equal across all levels of income. The fraction of the poorest fifth of households with a minimum wage worker is 22.4%. This is likely due to households with high school or college students who often work part time for minimum wage, regardless of their household’s overall income.

Proponents of a minimum wage argue that the economic and social benefits to workers and lower income families outweigh the economic costs. One argument for a higher minimum wage in Pennsylvania is that without it, the state will lose laborers to neighboring states like New Jersey that have instituted a minimum wage higher than federally mandated. Between 1996 and 1997, Pennsylvania’s employment rate was negatively affected by the higher minimum wage in New Jersey. There is also little consensus that a higher minimum wage would lead to overall job loss. Six hundred economists petitioned Congress to raise the federal minimum wage to $10.10 and noted that “increases in the minimum wage have had little or no effect on the employment of minimum wage workers”.

Much of the controversy surrounding a minimum wage is due to the politically polarizing nature of the issue itself. In the United States, the Democratic Party has long supported the idea of minimum wage and it was President Franklin Delano Roosevelt, a Democrat, who signed the first federal minimum wage into law. The Republican Party, who espouse the benefits of the free market, argue that price floors in labor markets make it impossible for the market to reach equilibrium and therefore full employment is impossible. The current Governor of Pennsylvania, Tom Wolf, a Democrat, has supported a minimum wage increase in Pennsylvania from $7.25 per hour to $12 per hour.

Current Arguments

In the years since there have been several efforts to raise Pennsylvania’s minimum wage again. Current governor Tom Wolf has been very supportive of these efforts in his governorship. Tom Wolf has stated that he would like to raise the rate to $10.10 and further on the number he used became twelve dollars an hour. Tom Wolf as governor has often fought low wages by raising the wage for workers in areas where he can set the pay rate (government workers). He has signed an executive order to raise the minimum wage in the state and has looked for legislative cooperation. Christine Tartaglione a Democratic State Senator has formulated an ambitious plan to drastically raise the minimum wage. Her intention is to help the lowest paid workers. This plan will raise the wage to fifteen dollars an hour by 2024 and keep raising in increments past this date. Patty Kim is another state senator that has a similar plan where the state will reach fifteen dollars an hour by 2024. Research has been conducted that seems to support the viability of such a plan. However, there is opposition. The National Federation of Independent Business released a report against this measure. It has been unable to come up for a vote but a colleague recently trying to put it in action using a discharge petition. Representative Dan Moul was able to shut down these efforts using arguments about a “taxpayer’s budget”. Pittsburgh City Councilor Dan Gilman has supported efforts to raise wages in both his city and the state as a whole. A stance of raising minimum wages seems to be popular in the city of Pittsburgh. He mentions a dynamic of nearby states having higher wages and lower unemployment and Pennsylvania standing on its own.

References

Footnotes

Category:Minimum wage law Category:Pennsylvania law