President Barack Obama proposed raising the federal minimum wage during Tuesday’s State of the Union address, calling for it to be increased from the current $7.25 per hour to $9 per hour and index it to inflation.
The increase would be phased in, reaching $9 in 2015.
In Pennsylvania, the minimum wage is the same as it is at the federal level.
Mark Price, a labor economist with the progressive Keystone Research Center in Harrisburg, said the move could directly impact about half a million people in Pennsylvania.
“A full-time worker earning minimum wage would take home an extra $3,600 a year, so that’s an important amount of pursing power those folks will have,” said Price.
According to the U.S. Bureau of Labor Statistics, 97,000 people in the commonwealth made exactly minimum wage in 2011. Another 96,000 made less. For more information, click here.
Price says based on past experiences where the minimum wage was increased, people making just above $9 per hour could stand to benefit as well as companies aim to pay competitive wages.
“There will be some ripple. Current research suggests that the ripple effect is somewhere in the neighborhood of a dollar (per hour),” said Price.
To see a breakdown by CNN/Money on the demographics of people making minimum wage nationwide, click here.
But, some business leaders are pushing back against the proposal, saying in a time of fragile economic recovery, increasing the cost of doing business could lead to less hiring.
“The timing on this is just horrible,” said Dave Black, president and CEO of the Harrisburg Regional Chamber and CREDC.
Black called the proposal “more political gamesmanship” and said the move would impact small businesses as they attempt to deal with rising health care costs as well.
Gene Barr, president and CEO of PA Chamber of Business and Industry, pointed to 2007 when Pennsylvania raised the state minimum wage to $6.25. At the time, that was above the federal minimum wage, which was $5.15.
“We have numerous examples where our members in order to accommodate the higher wage rate have had to reduce hours, lay off, not hire,” said Barr.
Republicans in Congress have balked at the President’s proposal.
“I don’t think it’s going to (get votes) on either side of the aisle,” House Majority Whip Kevin McCarthy told Fox News. “It’ll take away from the economy.”
One concern being raised is businesses passing the cost onto consumers.
Mark Price agreed it is possible consumers will see an impact.
“If anything, you’re likely to see a few cents on the cost of a hamburger,” said Price. “The current view is that if there is in an impact, it’s likely to be very small. So, the net benefit of a minimum wage increase is actually quite substantial compared to potential job losses.”
Price pointed to research that shows people making minimum wage tend to spend much of their income, thus putting more money into the economy.
James Williams, a student at Harrisburg Area Community College, said he worked for minimum wage at a fast-food restaurant before starting classes this semester. He said it was a challenge as he tried to help support his child and save up for school.
A person who works full-time at minimum wage earns $290 per week.
Recalling getting his paychecks, Williams said, “You look, you know, and ‘I just worked 40 hours, and this is it?’”
He said increasing the minimum wage to $9 per hour probably wouldn’t make a “big difference,” but he said it would help him to afford textbooks and other college costs.
11 Comments to “Minimum wage increase: What it means for you”
February 15, 2013 at 7:08 PM
And where is this increase coming from, oh illustrious master? Get an education and minimum wage isn't a factor. How many minimum wage workers will lose there job due to the increase to the small business owner? Just how many idiots are in Washington???
February 15, 2013 at 8:35 PM
these so called small business make there share of money they need to stop being so greedy and share some with the people that make it happen for that so called small business cause if it were not for the employees those plastic assholes with asses the shape of there seats could not keep it going so they need to quit bitching on how much there employees are making and just let people live a somewhat good or better life !!!!!!
February 15, 2013 at 7:22 PM
Do you not think about how many people may not be able to get an education, those who are raised in a society that thinks education is not important? I was raised that way, it took me until I was 25 to realize that I needed to make something of myself. I am proud to say I will be a graduate in a little while, the first graduate of my family. I was able to overcome things, not everyone is that fortunate. All they grow up knowing is working for the bare minimum. I hope to see the day when those people can at least survive off that much.
February 15, 2013 at 8:36 PM
these so called small business make there share of money they need to stop being so greedy and share some with the people that make it happen for that so called small business cause if it were not for the employees those plastic assholes with asses the shape of there seats could not keep it going so they need to quit bitching on how much there employees are making and just let people live a somewhat good or better life !!!!!!
February 15, 2013 at 9:27 PM
The minimum wage should be adjusted every year equal to the cost of living.
February 16, 2013 at 12:43 AM
I can't see min wage ever adjusting down in good economies so tying it to a fluctuating index can't work. It would be nice if people can earn a respectable wage to be able to survive with one full-time job. One also must think about those who ignore the constant hammering at young ages that you must be serious about your education and go through at least high-school graduation to make anything of yourself. If you choose to ignore those recommendations, you end up living in poverty. You make poor choices, you must make more difficult changes and possibly have a more difficult life.
Young people have the information that tells them that life will be difficult with less education. Money will not go as far if you do things before you have the means to support it. Things like marriage, children, smoking, junk food, alcohol, drugs, prison, unnecessary electronics and plans, elaborate hobbies like pimping up your vehicle, etc. Sometimes I cannot feel bad for someone who chose to make bad choices and I myself live at the border of poverty level. I know what my bad choices were and are and won't blame anyone else. I make a wage above minimum and survive at a comfort level that is below most that I know.
I also wonder why many companies work the hell out of people they employ with mandatory overtime when they could hire more people to cover extra work and give more people a slice of the wages. It makes more sense to have more on the payroll to cover things like vacations and illness instead of upsetting and overworking fewer people by making scheduling ultimatums and mandatory overwork (which pays time and half for hourly positions).
February 16, 2013 at 1:04 AM
Fucking great now I have to pay the dumb Mexicans more money. Worthless skeevy fucks.
February 16, 2013 at 9:19 AM
What you have to do is get a civil tongue in your head. Profanity and ethnic slurs lose the argument before it starts.
February 16, 2013 at 10:12 AM
from a stereotypical point of view, "Mexicans" work harder at their low wage jobs than those who do not appear to be "Mexican". Just ask any business owner who employs "Mexicans" in low-wage positions that "non-Mexicans" refuse to take.
In most cases, the "worthless skeevy fucks" look like stereotypical Americans. I know of quite a few and they don't know any Spanish except the words for pot.
Vittorio, do you know the Spanish words for pot?
February 16, 2013 at 1:08 AM
Let's see. An extra $1.75/hr x 40 hours is $70 / week more per employee (which is taxed)
100 employees is $7000 more per week to the employer.
The employer would have to layoff 24 people and make 76 work harder for that increase or the employer would have to make revenue or spending cuts to compensate. Or, the employer would have to take pay freezes and cuts with higher wage employees and cut profits.
Is a small businessperson willing to budget better to keep people who are happier to work for $9/hr than $7.25?
February 20, 2013 at 12:35 AM
I think minimum wage should be adjusted to the cost of living