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Little Dignity In $7.25/hour

September 3, 2018

Pennsylvania politicians who condemn the “welfare state” often cite the “dignity of work” when attempting to attach work requirements to public assistance or otherwise rend the public safety net.

They must think dignity comes cheaply. As they continue to press work, they also continue to make it a losing proposition for thousands of unskilled, low-wage workers, the state economy and the commonwealth’s treasury.

Legislators opposed to a minimum-wage increase continue to warn that it would drive down employment and hurt low-income workers, even though Pennsylvania is surrounded by other states that regularly have raised their minimum wage rates over the last four years without any such effect. Ohio, Maryland, New York and New Jersey all have enacted laws that will drive their minimum wages to at least $9.50 an hour and to as much as $15 an hour by 2024.

Pennsylvania clings to the $7.25 minimum wage that was implemented at the federal level in 2009. According to the Keystone Research Center, a left-leaning Harrisburg-based think tank, the $7.25 minimum wage provides less buying power than the $1.60 hourly minimum wage 50 years ago, in 1968.

Gradually increasing the minimum wage over several years, as proposed by Gov. Tom Wolf, obviously would improve the lot of the poorest workers. But it also would serve the commonwealth in several ways. Low-income earners would pump the money directly back into the economy. That higher economic activity would increase sales tax revenue along with personal income tax revenue. And most important, it would stimulate some upward pressure on wages up the ladder, which have hardly budged in Pennsylvania despite 4.2 percent unemployment and a tight labor market.

And, since anyone earning $7.25 an hour falls below federal poverty guidelines, raising the wage would diminish the demand for the very services that lawmakers seek to limit by extolling the dignity inherent in work.

Pennsylvania is the only state in the Northeast that has not increased its minimum wage amid the long economic expansion that began in 2009. It’s time for an increase.

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