MINIMUM WAGE MOVING CLOSER TO BEING A LIVING WAGE
By: State Senator Connie Williams
 

Everyone should have the opportunity to earn a decent wage – whether it is a young family trying to buy their first home, a single mother supporting her family, a college student trying to contribute to his or her college education, or a senior who decides to return to work in an effort to make ends meet. People need to work to survive.

 The bill signed into law by Governor Ed Rendell will begin increasing Pennsylvania’s minimum wage to a living wage. At $5.15 an hour, the current minimum wage provides an annual salary of $10,712 a year for someone working full-time. This is well below the federal poverty level for a family of two (for 2006 it is $13,200).

 Under the new law, Pennsylvania’s minimum wage will increase to $6.25 an hour beginning Jan. 1, 2007 (this is equivalent of $250 a week or $13,000 annually), and then to $7.15 an hour beginning July 1, 2007 ($286 a week or $14,872 annually).

 The language includes a small business exception, which applies to employers whose workforce consists of ten or less full-time employees (franchises of larger chains do not qualify). The pay schedule for small business (based on a 40-hour workweek) is as follows: $5.65 an hour beginning Jan. 1, 2007 ($226 a week or $11,752 annually); $6.65 an hour beginning July 1, 2007 ($266 a week or $13,832 annually); and finally to $7.15 an hour beginning July 1, 2008 ($286 a week or $14,872).

 Additionally, the new law allows for a training wage, which would be equivalent to the federal minimum wage. A training wage can be paid to employees under 20 for the first 60 calendar days of employment. The new law prohibits employers from dismissing current employees to hire new employees at the training wage.

 Employers who hire students part-time for seasonal positions may apply for exemptions to pay 85 percent of the new minimum wage.

 Finally, the law includes provisions that would preempt municipalities from establishing their own minimum wage regulations.

 This is a long overdue change. I believe it is morally reprehensible to ask anyone who is putting in a full-days work to earn less than the federal poverty level. For years, we have talked about moving people from welfare to work. In many cases the opportunities that are available to people during this transition are minimum wage jobs, and most of those jobs do not provide health-care benefits.

 The current minimum wage was set in September 1997. When inflation is figured in, the buying power of the dollar decreases and so today’s $5.15 an hour minimum wage is the equivalent of only $4.19 in 1995. How can anyone be expected to put a roof over their head, food on the table and pay for utilities at this rate? Never mind that in a single parent household there is a need to pay for childcare.

 Raising the minimum wage is not the sole solution to ending poverty and strengthening Pennsylvania’s economy, but it is part of a larger solution. The less people are paid, the more the state pays for social programs to support low-income families. Conversely, the more people earn, the better able they are to contribute to the economy through taxes and increased buying power.

 An increase in the minimum wage has stalled by a legislative logjam for years. Some opponents have suggested the federal government should set the new minimum wage, however to date our national leaders have opposed an increase. Twenty-two other states haven’t waited and now offer minimum wages that range from $6.15 an hour to $7.63 an hour. Among those 22 states are Delaware, Maryland, New Jersey, New York and West Virginia.

 According to the state Department of Labor and Industry, about 423,000 Pennsylvania workers earn between $5.15 and $7.14 an hour. The vast majority of minimum wage earners are not teenagers earning pocket change. They are the men and women who perform work that we all depend upon – whether it is running a cash register, cooking or serving food, providing clerical support, or caring for our children or elderly.

 Everyone deserves to earn a living wage. This new law will help Pennsylvania move toward providing that wage. It’s about time.