Raise the WagePA, 112 N. Broad St. Philadelphia, PA. 19102- 215-557-0822 www.RaisetheWagePA.org, facebook.com/RaisetheWagePA, @RaisetheWagePA

It is time to raise Pennsylvania’s minimum wage to at least $10.10 an hour

It would add $1.9 billion in new wages to local economies.1

66% of Pennsylvanians support at least $10.10,2 including 53% of PA Republicans.3

It would raise $225 million in revenue for the state budget.4

61% of small business owners nationally support raising the minimum wage to $10.10.5

80% of business executives support raising their state’s minimum wage.6

Nearly 1.3 million PA workers will get a raise. 87% of these workers are over 20 years old.7

It has been 10 years since the legislature voted to raise the minimum wage.8

1. Keystone Research Center analysis of Current Population Survey & American Community Survey data. http://keystoneresearch.org/sites/default/files/KRC_CountyWageBoost.pdf

2. Mercyhurst Center for Applied Politics survey. http://www.mercyhurst.edu/sites/default/files/uploads/%3Cem%3EEdit%20Simple%3C/em%3E%20MCAP%20Polls%20/poll_3_final_report.pdf

3. Public Policy Polling survey. http://www.publicpolicypolling.com/main/2015/10/trump-carson-tight-in-pa.html 4. Keystone Research Center report based on data from the Institute on Taxation & Economic Policy & the Center for American

Progress. http://keystoneresearch.org/sites/default/files/KRC_PW_BudgetImpacts1617_0.pdf 5. American Sustainable Business Council & Business for a Fair Minimum Wage poll.

http://businessforafairminimumwage.org/sites/default/files/BFMW_ASBC_Minimum_Wage_Business_Poll_Report_July_2014.pdf 6. The Washington Post, reporting on a LuntzGlobal poll. https://www.washingtonpost.com/news/wonk/wp/2016/04/04/leaked-

documents-show-strong-business-support-for-raising-the-minimum-wage/ 7. Economic Policy Institute analysis of Harkin-Miller minimum wage proposal using Current Population Survey Outgoing Rotation

Group microdata. http://keystoneresearch.org/sites/default/files/KRC_Demographics_1010_0.pdf 8. Pennsylvania General Assembly.

http://www.legis.state.pa.us/cfdocs/billinfo/bill_history.cfm?syear=2005&sind=0&body=S&type=B&bn=1090

 

 

By Stephen Herzenberg and Mark Price1

The Impact of Raising the Minimum Wage to $10.10 on the State Budget

Raise the Wage PA (http://raisethewagepa.org/), a statewide coalition of community, labor, faith-based, and other organizations is urging the Pennsylvania General Assembly to raise the state’s minimum hourly wage above the federal level of $7.25 to $10.10.

This Policy Watch estimates the impact of this proposed increase on the state budget. Specifically we estimate that a minimum wage increase will increase state tax revenues by $121.5 million and generate another $104 million in savings in reduced Medicaid spending.

Medicaid Expansion

Increasing the minimum wage pushes more families from the range in which the state pays nearly half the cost of Medicaid (48% in 2016) into the range in which – under the Medicaid expansion program – the federal government pays most or all of the cost.2 More specifically, a minimum wage increase to $10.10 per hour would shift an estimated $104 million in Medicaid payments from the state to the federal government – that shift represents savings for the Pennsylvania General Fund budget.3

Personal Income and Sales and Use Taxes

The state would also benefit financially from a $10.10 minimum wage increase because the resulting increase in wages and incomes would generate an estimated $121.5 million more in state income and sales tax revenue.4

This estimate is based on Economic Policy Institute figures that show how the $1.9 billion in total wage increases from a $10.10 minimum wage would be spread across the family income distribution and on Institute for Taxation and Economic Policy estimates of the state income and sales tax rate on each part of the family income distribution.

Conclusion

Adding $121.5 million in state tax revenue to the $104 million in state Medicaid cost savings yields an estimated total of $225.5 million in benefits to the state budget for the 2016-17 fiscal year.

                                                            1 Stephen Herzenberg is an economist and executive director of the Keystone Research Center.  Mark Price is a labor economist at the Keystone Research Center. 2 For incomes low enough to qualify for Medicaid even before Medicaid expansion, the share of Medicaid costs paid by the state and federal government each year can be found online at http://kff.org/medicaid/state‐indicator/federal‐matching‐rate‐and‐multiplier/   

3 This $104 million estimate is based on Rachel West and Michael Reich, A Win‐Win for Working Families and State Budgets: Pairing Medicaid Expansion and a $10.10 Minimum Wage, Center for American Progress and the Institute for Research on Labor and the Economy at U.C.‐Berkeley, Appendix D, p. 30. Pairing Medicaid Expansion and a $10.10 Minimum Wage 4 Our estimates assume the minimum wage is increased to $10.10 on July 1st 2016.  

Table 1.

New state revenue from an increase in the minimum wage to $10.10 by July 2016 (figures are in millions of dollars)

Revenues/Savings Fiscal Year

2016-17

Personal Income Tax $45.6Sales and Use Tax $75.9Medicaid Expansion $104.0Total $225.5Source. Keystone Research Center based on data from the Institute on Taxation on Economic Policy and the Center for American Progress

Who will be affected by an increase in the Pennsylvania

minimum wage to $10.10 per hours by July 2016

Workers currently making less than the increased minimum wage will be directly

affected plus workers who make just above the new minimum wage will be indirectly

affected by the “ripple effect” of an increase.

1,265,000 Pennsylvania workers would get an increase in pay.

58.6% of those affected will be women.

87% of those affected would be over age 20 (not teenagers).

73.4% of affected workers will be white.

36.4% of all Latino workers will get a raise with an increase.

32.3% of all Black workers will be affected.

29.6% of all Asian workers will be affected.

23.4% of affected workers have children.

40.3% of affected workers will have full time jobs.

83.6% of workers who will be affected by a minimum wage increase have a high

school degree or more.

28.8% of affected workers will have some college education.

16.4% of affected workers who have children will be the only bread winner in their

family.

Source: Economic Policy Institute analysis of Harkin-Miller minimum wage proposal using Current Population Survey Outgoing Rotation Group microdata Prepared by Raise the Wage PA 112 N. Broad St. 11th Floor, Philadelphia, PA 19102 215-

557-0822 www.RaisethewagePA.org, Facebook.com/RaisetheWagePA, Twitter: @RaisethewagePA

Is Pennsylvania Being Left Behind Economically Because

of Low Wages? By raising the minimum wage so that Pennsylvania’s working families can meet the basics, their spending boosts Main Street, creates jobs and helps our communities thrive. Pennsylvania is being left behind economically by states around the country that are raising the minimum wage. Other States are Leaving Pennsylvania Far Behind: Around the country, states and cities are raising the minimum wage, pouring billions of dollars into their local economies and helping working people meet the basics to care for and support their families.29 states have already increased their minimum wage. Every day that Pennsylvania waits means lost income to families, businesses and the state’s economy. New York is raising its minimum wage to $15 by 2019 California is raising its minimum wage to $15 by 2012 Chicago is raising its minimum wage to $13 by 2019

Raising the minimum wage in Pennsylvania to just $12 would mean a boost in spending power

for 1.4 million working people, one-out-of-four working Pennsylvanians. Business leaders across the country want to raise the minimum wage: A survey by the Council of State Chambers of Commerce found that 80 percent of business executives support raising the minimum wage in their states. That’s a fact that the big business lobby wants to hide. Raising the minimum wage means billions of new spending at Pennsylvania businesses: The New York State Department of Labor calculated that a $15 minimum wage would

increase consumer spending in New York by $15.7 billion. That’s a key reason that business groups representing more than 32,000 New York small businesses endorsed the $15 minimum wage.

The University of California calculated that the $15 minimum wage passed in Los Angeles will add $1.2 billion to consumer spending in local businesses, two times as much as the cost of higher wages.

It’s time for the Pennsylvania economy to work for all of us, not just the wealthy! The minimum wage in Pennsylvania is so low, that many full time working people qualify

for food stamps and other public assistance. Pennsylvania businesses should pay working families enough to live on.

It’s ridiculous that even skilled, important jobs like nursing assistants, preschool teachers, and paramedics pay less than $15. We should value working people more than that.

Don’t Leave Pennsylvania Behind Because of Low Wages Raise the Minimum Wage in Pennsylvania Today!

Raise the WagePA, 112 N. Broad St. Philadelphia, PA. 19102- 215-557-0822 www.RaisetheWagePA.org

ELIMINATING THE TIPPED MINIMUM WAGE We support eliminating the tipped minimum wage in favor of one fair minimum wage. As is, most restaurant workers earn the bulk of their income through tips. With the federal tipped minimum wage being $2.13 an hour and $2.83 in Pennsylvania, workers base pay results in $0 paychecks. Although some restaurant workers do make great money living off tips, they are the exception.

The majority of tipped restaurant workers live shift-to-shift. The national median wage for tipped workers (including tips) is $8.75 an hour. They are dependent on the generosity of customers for their livelihood.

More than 70% of servers are women. Unfortunately, sexual harassment is all too often treated as being ‘just part of the job’ in the restaurant industry. According to the Equal Employment Opportunity Commission (EEOC), the restaurant industry is the single-largest source of sexual harassment charges. Hundreds of our members have shared stories with us about being touched or treated inappropriately by their customers, and not being able to do anything about it because they depended on those same customers for a decent tip.

We are not against ‘tipping.’ We are against a separate tipped minimum wage so low that it forces workers to be solely dependent on the customer for their wages.

Restaurant Opportunities Center 1329 Buttonwood St. 3rd Fl. Philadelphia, PA 19123 Phone: (215) 867-9747 Phillyroc@gmail.com -

National Poll: Small Business Owners Favor Raising Federal Minimum Wage

Small business owners with employees strongly favor raising the federal minimum wage to $10.10 and adjusting

it to keep up with the cost of living in future years, according to a scientific national opinion poll. The federal

minimum wage has been set at $7.25 an hour since it was last increased six years ago in July 2009.

A striking 61% of small business employers support increasing the federal minimum wage in three stages over

two and a half years, and then adjusting it annually to keep pace with the cost of living. This finding is higher

than reported in previous small business polling, indicating growing support among small business owners for a

$10.10 federal minimum wage.

Small business owners believe that a higher minimum wage would benefit business in important ways: 58% say

raising the minimum wage would increase consumer purchasing power. 56% say raising the minimum wage

would help the economy. In addition, 53% agree that with a higher minimum wage, businesses would benefit

from lower employee turnover and increased productivity and customer satisfaction.

Small business support for raising the federal minimum wage is strong across the country. Employers favor

raising the minimum wage to $10.10 by a 67% majority in the Northeast, 61% in the Midwest, 60% in the West

and 58% in the South.

The poll of small business employers was conducted by Lake Research Partners, June 4-10, 2014, and

commissioned by Business for a Fair Minimum Wage and the American Sustainable Business Council. The

scientific nationwide live telephone survey included owners of for-profit small businesses with 2 to 99

employees. A plurality of respondents were Republican, reflecting the Republican tilt of small business owners

nationally. 43% of respondents identified themselves as Republican or independent-leaning Republican, 28% as

Democrat or independent-leaning Democratic, and 19% as independent. See full report online at

bit.ly/MinWageBizPoll.

Pennsylvania Business for a Fair Minimum Wage Sign On Statement

As business owners and executives, we support raising Pennsylvania’s minimum wage. It’s

good for business, customers and our economy. The minimum wage has been stuck since

2009 at $7.25 an hour – just $15,080 a year for health aides, childcare workers, cashiers and

other minimum wage workers. Pennsylvania lags behind 29 states, including all our neighboring

states, with minimum wages above $7.25. With less buying power than it had in the 1960s,

today’s minimum wage impoverishes working families and weakens the consumer spending at

the heart of our economy.

Raising Pennsylvania’s minimum wage makes good business sense. Workers are also

customers. Minimum wage increases boost sales at local businesses as workers buy goods and

services they could not afford before. And nothing drives job creation more than consumer

demand. Businesses also see cost savings from lower employee turnover and benefit from

increased productivity and customer satisfaction. The most rigorous studies of the impact of

actual minimum wage increases show they do not cause job loss. Raising the minimum wage

will keep more dollars circulating in our local economy and reduce the strain on our social safety

net caused by inadequate wages.

A recent national poll shows that 61 percent of small business owners with employees

support increasing the federal minimum wage to $10.10 and adjusting it yearly to keep pace

with the cost of living.

We support a phased increase in Pennsylvania’s minimum wage to at least $10.10 an hour

and then adjusting it annually so the minimum wage keeps up with the cost of living rather than

falling behind.

Business for a Fair Minimum Wage is a national network of business organizations, business

owners and executives who believe a fair minimum wage makes good business sense, including

Stonyfield, Ben & Jerry's, New Belgium Brewing, Amy’s Kitchen, American Income Life,

Parnassas Investments, South Carolina Small Business Chamber of Commerce, Greater New

York Chamber of Commerce, American Sustainable Business Council, and PA-based

businesses, such as Bar Marco, Girard Brasserie & Bruncherie, Arias Agencies, Legume Bistro,

The Lancaster Food Company, Harrisburg Midtown Arts Center, RDI, Zee Green Bags, Azavea,

Trolley Car Diner, MOM’s Organic Market, Community Heritage Partners, Exact Solar, Night

Kitchen Bakery & Cafe, Goldstein Investigations, West Side Auto Repair, Winebrake & Santillo,

La Barberia, Mugshots Coffeehouse, Terry’s Auto Detailing, Lia’s Catering, Solar States,

Sustrana, Hausman Agencies, Naturescapes Landscape Specialists, Cosmic Catering, Green

Heron Tools, Palandro LLC, One Village Coffee, BizMiner, Jarvus, Falls Flowers, Rhiza and

many others.

Contact: Alissa Barron-Menza, alissa@businessforafairminimumwage.org, 717-440-2651

See the statement online at bit.ly/BFMWPa

Minimum Wage Legislation in PA General Assembly – 2015-16

PA Senate SB195 Senator Christine Tartaglione – D – Philadelphia County Date: Minimum Wage Set to: July 1, 2015 $8.67 per hour Jan. 1, 2016 $10.10 per hour Increased by annual cost-of-living adjustment beginning Jan. 1, 2017. Increases penalties for wage theft up to 2x subject wages plus wages themselves. Provides for increased fines. Increases record-keeping requirements for Dept. of Labor & Industry and for employers. Creates a Wage Enforcement Fund. Removes statewide preemption of local minimum wage laws. SB196 Senator Christine Tartaglione – D – Philadelphia County Date: Tipped Minimum Wage Set to: July 1, 2015 $3.95 per hour Jan. 1, 2016 70% of minimum wage Increases record-keeping requirements for Dept. of Labor & Industry SB197 Senator Christine Tartaglione – D – Philadelphia County Increases minimum wage by annual cost-of-living adjustment beginning Jan. 1, 2016. SB198 Senator Christine Tartaglione – D – Philadelphia County Provides for additional fines for wage theft. Increases record-keeping requirements for Dept. of Labor & Industry and for employers. Creates a Wage Enforcement Fund. SB199 Senator Christine Tartaglione – D – Philadelphia County Outlaws deduction of credit card fees from employee tips. SB836 Senator Daylin Leach – D – Delaware & Montgomery Counties Raises the minimum wage (including tipped workers) to $15 per hour 30 days after passage. Increases minimum wage with annual cost of living adjustment beginning 1 year after passage. SB610 Senator Scott Wagner – R – York Date: Minimum Wage Set to: July 1, 2015 $7.75 per hour July 1, 2016 $8.25 per hour July 1, 2017 $8.75 per hour Workers 18 and under are exempt from the raise. Includes language to reinforce the preemption of local minimum wage laws.

PA House HB436 Representative Mark Cohen – D – Philadelphia County Date: Minimum Wage Set to:

60 days after passage $9.00 per hour

425 days after passage $10.10 per hour

790 days after passage $11.50 per hour

Date: Tipped Minimum Wage Set to:

Upon passage $3.83 per hour

365 days after passage $4.83 per hour

730 days after passage 70% of the minimum wage

Increased by annual cost-of-living adjustment beginning Jan. 1, 2017. Department of Labor & Industry must collect information on numbers of employers who violate act (including amounts of fines imposed) and publish it on their website (updated every six months). Removes statewide preemption of local minimum wage laws. HB2017 Representative Mark Cohen – D – Philadelphia County Date: Minimum Wage Set to: 90 days after passage $9.00 per hour 365 days after passage $10.50 per hour 730 days after passage $12.50 per hour 1095 days after passage $13.50 per hour 1460 days after passage $15 per hour Increased by annual cost-of-living adjustment beginning 1 year after minimum wage reaches $15 per hour. Department of Labor & Industry must collect information on numbers of employers who violate act (including amounts of fines imposed) and publish it on their website (updated every six months). Removes statewide preemption of local minimum wage laws. HB250 Representative Patty Kim – D – Dauphin County Date: Minimum Wage Set to: 6 months after passage $9.00 per hour

12 months after passage $10.10 per hour

Date Tipped Minimum Wage Set to:

6 months after passage 50% of the minimum wage

12 months after passage 75% of the minimum wage

Increased by annual cost-of-living adjustment beginning Dec. 31, 2016. Increases fines for wage theft. Removes statewide preemption of local minimum wage laws.

Principles of the Raise the Wage PA Coalition

We support an increase in the state and federal minimum wages to at least $10.10 per hour.

We support a cost of living adjustment in any legislation so that the minimum

wage keeps pace with inflation.

We oppose a separate minimum wage for tipped workers.

We oppose the preemption of the right of localities to set their own minimum wages in Pennsylvania.

We support a significant increase in fines on employers who engage in wage

theft against their employees and strengthening enforcement efforts.