Philadelphia's minimum wage has been $7.25 an hour since 2009 – here's why attempts to boost it have failed

Why is Philly's minimum wage so low?

The biggest factor is that Philadelphia doesn’t have the authority to set its own minimum wage – one that would fairly reflect town’s cost of living. In Pennsylvania, local governments should not allowed to boost the minimum wage above the state level of $7.25 an hour. For an adult working full-time, that's $15,080 per 12 months.

In June 2023, the Democratic-controlled Pennsylvania House of Representatives passed a bill But a plan to progressively increase the minimum wage nationwide to $15 an hour by 2026 failed within the Republican-controlled Senate.

While that could be enough to get by in rural Pennsylvania, it just doesn't work in a big metropolitan area. The MIT Living Wage Calculator estimates that a single person in Philly without children needs about $24 per hour to support yourself. Add two children and the number greater than doubles.

The Philadelphia City Council has called on the state parliament Harrisburg desires to introduce and pass a bill that will allow town to set its own minimum wage, but to this point Harrisburg has not budged.

How many Philadelphians make minimum wage? What form of jobs are these?

As of 2018, about 9% of employed Philadelphia residents age 16 or older earned $7.25 per hour or less. That corresponds to around 44,000 people. Contrary to popular belief, these should not predominantly teenagers getting their first job. Actually, it's in Philadelphia only 7% of employees earning the minimum wage are teenagers. Over half are between 25 and 54 years old.

How could anyone earn lower than the minimum? It might be because they The employer will not be complying with the lawor it is expounded to the industry by which they work. For example, jobs within the catering and hospitality industry have much lower minimum wage requirements – $2.13 per hour federal and $2.83 per hour in Pennsylvania – since suggestions make up a good portion of their salary. Exploitation of employees who face obstacles to traditional employment because they are undocumented or were locked upalso occurs steadily.

Over and beyond, almost 40% of town's workforce makes $15 per hour or less. Raising the minimum wage would profit a good portion of Philadelphia's workforce because if the minimum wage is repealed, In general, wages are likely to rise.

Philadelphians who make minimum wage or less are likely to do that employed in 4 sectors: Hotel and catering services, retail, health and social assistance and academic services. The most typical jobs are cashiers, nursing assistants, and most restaurant jobs, similar to cooks and waiters.

These employees are disproportionately non-white or Hispanic, young, and with no college degree. Geographically, they’re most concentrated within the north, northeast, and southwest of Philadelphia – Traditionally lower income areas.

A worker stands next to a hand truck loaded with products at a Walmart store
Millions of Americans who receive Medicaid and SNAP support work full time.
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Who does this hurt essentially the most?

It hurts those that haven’t any alternative but to just accept such paltry wages. In 2018 nearly 4 in 10 Pennsylvanians had trouble paying the essential costs. Many families are stuck within the cycle of poverty, even when the adults work full time. This was the results of a study from 2020 about 70% of employees In the United States, those that receive Medicaid and SNAP support work full time, including for giant corporations similar to McDonald's and Walmart.

A low minimum wage for Philadelphians also reduces town's revenue from payroll taxes. This limits the resources available to town to speculate in infrastructure, clean streets, parks and other public spaces and services.

Higher minimum wages can also be possible Improving health outcomes and reducing crime and recidivism rates.

Who advantages essentially the most?

In theory, entrepreneurs profit from a low minimum wage. It is sensible, right? The fewer staff they should pay, the extra money stays of their coffers. But that's a short-sighted stance that ignores the larger financial impact that a low minimum wage brings: most notably, the high cost of worker turnover.

Recent studies have shown that the typical cost of sales is 40% of the annual salary of a position. This amount covers all the things from increased additional time wages to the prices of recruiting and training recent employees. The longer a job stays open, the costlier it becomes.

Beyond the financial impact, high turnover rates also create environments where good employees leave the corporate, excellent customer support falters, and the corporate as an entire weakens.

So who really advantages from a minimum wage? I’d argue that nobody is.

What wouldn’t it take for Philly to boost its minimum wage?

In 2019, the Philadelphia City Council agreed to pay at the least all city employees and contractors $15 per hour. To extend this to all employees, Philly would have to be given the ability to create change by itself and never be certain by Harrisburg's minimum wage decision.

It is abundantly clear that the general public desire is there. Reply for a non-binding answer Election query in 2019Philadelphia voters overwhelmingly supported a $15 an hour minimum wage. That's how other cities prefer it Washington And Tacoma, Washington, which eventually passed an increased minimum wage, began their efforts. However, Philadelphia employees, advocates and coalitions have yet to effectively advocate on this issue.

If the local business community mobilized, it will likely push state policymakers to act. The Philadelphia Department of Commerce was a vocal supporter so far.

Another potential boon is Pennsylvania Governor Josh Shapiro's recent budget address in February 2024, whose Charge $15 an hour received a standing ovation. Yet despite the applause, there continues to be resistance from Senate members who say this can be the case hurts small business owners. This was consistently the case debunked by economists and researchers. State Democrats also say they’re willing to achieve this Create tax credits for small businesses to alleviate the stress this may increasingly cause.

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