PENNSYLVANIA MINIMUM WAGE FACT SHEET

HOUSE BILL 349

SPONSORED BY COHEN, BELFANTI, DeWEESE, JAMES, PARKER, CONKLIN, M. O'BRIEN, CURRY, EACHUS, SOLOBAY, WATERS, MELIO, LEVDANSKY, CALTAGIRONE, DePASQUALE, OLIVER, MYERS, LEACH, McGEEHAN, SIPTROTH, BENNINGTON, SANTONI, BLACKWELL, CASORIO, COSTA, FREEMAN, GEORGE, GIBBONS, GRUCELA, JOSEPHS, MAHONEY,

MANDERINO, ROEBUCK, PETRONE, KULA and STURLA.—February 9, 2007

This bill amends the Minimum Wage Act of 1968 (P.L. 11, No. 5) to further increase the minimum wage to an eventual level of $9.35/hr and it adds an annual COLA into the law.

This bill amends the Minimum Wage Act to require the following three-step increase in the minimum wage, after the already required July 1, 2007 increase to $7.15/hr:

1. Effective January 1, 2008, employers pay a minimum wage of $8.15/hr.

2. Effective January 1, 2009, employers pay a minimum wage of $8.75/hr.

3. Effective January 1, 2010, employers pay a minimum wage of $9.35/hr.

The bill also requires that on January 1, 2011 and each year after, the minimum wage would be adjusted for the increase in cost-of-living. This would be calculated by applying the percentage change in the CPI for all urban consumers for the Pennsylvania, New Jersey, Delaware and Maryland area, for the most recent 12 month period (as determined by U.S. Department of Labor). The Department of Labor & Industry would be responsible for calculating the annual adjustment.

SURROUNDING STATES/ OTHER STATES

There are 30 states plus the District of Columbia with higher minimum wages than the Federal Minimum Wage: Alaska ($7.15); Arizona ($6.75*); Arkansas ($6.25); Colorado ($7.50*); California ($7.50, $8.00 in 01/2008); Connecticut ($7.40); Delaware ($6.65), the District of Columbia ($7.00), Florida ($6.40*); Hawaii ($7.25), Illinois ($6.50); Iowa ($6.20 beginning in 04/2007, $7.25 in 01/2008); Maine ($6.75, $7.00 in 10/2007); Maryland ($6.15); Massachusetts ($6.75); Michigan ($6.95, $7.15 in 07/2007, $7.40 in 07/2008); Minnesota ($6.15); Missouri ($6.50*); Montana ($6.15*); Nevada ($6.15* w/o benefits, $5.15 w/ benefits); New Jersey ($7.15); New York ($7.15); North Carolina ($6.15); Ohio ($6.85*); Oregon ($7.50*); Pennsylvania ($6.25, $7.15 in 07/2007); Rhode Island ($7.40); Vermont ($7.25*); Washington State ($7.63*); West Virginia $5.85, $6.55 in 06/2007, $7.25 in 06/2008); and Wisconsin ($6.50).

*Future increases indexed to cost of living

Nearly 67% of all Americans live in states protected by higher minimum wages than mandated by federal law

MINIMUM WAGE AND POVERTY

The United States Department of Health and Human Services 2007 Poverty Guideline for a family of three is $17,170. A full time Pennsylvania minimum wage worker earns only $13,000, assuming he or she works 40 hours a week, 52 weeks a year. That is $4,170 below, or just 75.7% of, that poverty line. A one parent, one child family falls $690 below the poverty line for a family of two of $13,690.

The minimum wage is currently $6.25 per hour. If the minimum wage at its height in 1968 had been indexed for inflation, it would be over $9.10 today (calculated in year-end 2006 dollars).

How Many Pennsylvanians Would Benefit?

According to the Pennsylvania Dept of Labor and Industry, 257,000 or 7.9 % of the Pennsylvania's hourly workforce would benefit from a one dollar per hour increase in the state's minimum wage. 528,000 Pennsylvanians or 16.3% of the state's workforce would benefit from a two dollar per hour increase in the state's minimum wage. (According to data compiled by the PA Dept. of Labor and Industry from 2003 U.S. Dept. of Labor BLS Current Population Survey)

Who are Minimum Wage Workers?

According to the PA Department of Labor and Industry, 75% of minimum wage workers are adults aged 19 and over. It is not true that the minimum wage is mostly an issue for teenagers.

About 25% are in the 19-25 age group, where the reduced buying power of the minimum wage is a major factor in pricing college out of the reach of many working families. In the 70s a student could pay for tuition, room and board at a state college with a part-time, minimum wage job working on average 20 hours a week. Today, even a full-time minimum wage job would not come close to meeting college expenses. A student paying in-state tuition at would have to work 40 hours a week plus overtime to earn basic college expenses. For example, West Chester University tuition, room & board charges total $10,614 -- not including university fees, textbooks, transportation, etc. (And of course, a full-time student can not work full-time. Consider also that our neighboring states have lower college tuition rates and higher minimum wages—talk about brain drain)

Women are twice as likely to earn the minimum wage as men. As we all know, a small family in poverty is, all too often, a mother with one or two children. It is no mere coincidence that nearly one out of five children lives in poverty—their mothers are minimum wage workers.

Of adults over the age of 25, senior citizens are twice as likely to make the minimum wage as their younger counterparts.

NOT JUST A FEDERAL ISSUE

The minimum wage is not a federal issue, it is a fairness issue. This is an issue of simple social justice. As it is bad federal policy to allow a small family with a full-time wage earner working 40 hours a week 52 weeks out of the year to live in poverty, it is equally bad state policy. Today's minimum wage is not a living wage and it is not a fair wage for Pennsylvania’s families.