HARRISBURG, Pa. – Not only would raising the state's low-end pay not cost jobs, a new analysis finds a $10.10 Pennsylvania minimum wage actually would add thousands of jobs.
Mark Price, an economist at the Keystone Research Center who did much of the research, says for years people assumed raising the wage floor would mean more unemployment.
But he stresses repeated studies have found that's not the case. In fact, he says a $10.10 minimum would boost spending enough to create 6,000 jobs in the state.
"My spending is someone else's income,” he points out. “You are raising wages for a group of workers who tend to spend every dime, and they spend it in the local economy. That in turn generates income for somebody else."
Price says the new state minimum would benefit 1.2 million Pennsylvanians and put $1.8 billion more spending into the economy.
Critics of the minimum wage say it pushes some workers out of the job market.
Price says if the level were set too high, that might be the case. But he says what economists have found is that rather than causing massive layoffs, moderate increases in the minimum wage – enough to keep up with inflation – more often motivate employers to find ways to make the employees they have more productive. And that is good for the economy as a whole.
"We don't dig trenches anymore with hundreds of thousands of people with shovels,” Price points out. “We dig them with large capital equipment and a highly skilled worker. You get that kind of innovation as you allow the wage floor to rise over time."
Price adds one of the first studies that found no job losses looked at fast food restaurants around the Pennsylvania/New Jersey border after New Jersey raised its minimum wage. He says other studies have confirmed that finding since.
He says this new analysis found a larger proportion of employees in rural parts of the state would get a raise. In fact, Price says a $10.10 per hour minimum would boost the wages of more than a quarter of rural workers.
"There's a disproportionate share of workers in rural communities that would benefit from an increase,” he maintains. “Twenty-seven percent of the workers in rural communities would get an increase in their earnings."
