Earning enough to afford the basics
03/26/2014 01:51PM ● Published by ACL
By Mark Price and Chris Lilienthal
Do you remember your first job? Whether it was babysitting or busing tables or learning the ropes at the family business, you probably found the experience liberating – an opportunity to save up for a car or build a college fund.
You probably didn't earn much, but you got experience in the workforce that helped you move upward and onward to bigger and better-paying opportunities.
Today, too many adult workers are stuck in jobs that pay little more than those first forays into paid employment. And the bad news for all of us is that it is stalling our economy.
This is why Pennsylvania and the nation must raise the minimum wage. Doing so will boost the economy by providing more working families with income to spend on the basics like food, doctor visits, or car repairs.
Raising the minimum wage has already gained momentum nationally and is likely to be a defining issue in Pennsylvania's gubernatorial election this year. Most of Pennsylvania’s neighboring states, including Ohio, New York, New Jersey, Delaware, and most recently West Virginia, have raised their minimum wages above the federal rate of $7.25 per hour.
Seven in 10 Pennsylvania voters, including majorities of Republican, Democratic, and Independent voters, support raising the commonwealth’s minimum wage as well, according to a February Quinnipiac poll.
Profitable low-wage businesses and other special interests will work hard to deploy their power and influence to hold down workers' wages. Expect to hear lobbyists tell you that most minimum wage workers are teenagers and that raising the wage will cost them and others their jobs.
The truth is, in Pennsylvania, more than 80 percent of the million workers who would benefit from an increase in the minimum wage to $10.10 an hour are adults working more than 20 hours a week and contributing a notable share to their family's income.
The jobs argument also falls flat. The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high.
A higher minimum wage also raises productivity levels, hence living standards, over the long term. It encourages more employers to embrace the "good jobs" strategy modeled by companies like Costco.
Even business owners recognize the benefits of a higher minimum wage. An April 2013 poll found that 67 percent of small business owners support raising the minimum wage and linking future increases to inflation.
Workers too see the value of raising the wage in the wake of a slow recovery where all of the income growth has gone to the top, and middle-class wages are stagnant.
The economy especially needs a boost in Pennsylvania where job growth has steadily declined in each of the last three years. In 2013, Pennsylvania ranked 48th out of the 50 states in job growth, and many workers have become so discouraged about finding a job that they've stopped looking. Falling job growth means families have less income, which suppresses wages for all of us.
One way to get the economy going again – spurring job creation and wage growth – is to put more money in the hands of the lowest-paid workers who spend primarily at local businesses.
Many single mothers and fathers don't earn enough to keep food on the table for their kids. Wages are so low for many fast food employees that they fall below the poverty line and qualify for food stamps.
Raising the minimum wage would make work pay enough for these families to support themselves, reducing state and federal spending on human services programs.
Congress should act to raise the minimum wage to $10.10 an hour, as President Obama has proposed.
Pennsylvania lawmakers also have an opportunity to create more economy-boosting jobs and improve the quality of life for their constituents. Legislation has been introduced in Harrisburg to raise the state's minimum wage, bringing it more in line with our neighboring states.
Pennsylvania and the nation need more jobs where people earn enough to afford the basics. Otherwise our economy will suffer, and we all pay the price.
Raising the minimum wage is one powerful way we can accelerate our economic recovery and send a message to millions of low-paid Americans that their years of hard work are worth something.
Mark Price is the labor economist at Keystone Research Center, a research and policy development institute in Harrisburg. Chris Lilienthal is the Communications Director at Keystone Research Center and Pennsylvania Budget and Policy Center.