What CAAP Stands For
Raise The Minimum Wage (Click For More)
Let’s Talk Minimum Wage
CAAP supports a minimum wage increase to at least $10.15/hour for all Pennsylvania residents. This amount represents a $2.90/hour raise from the current minimum standard of $7.25/hour.
There are several bills that were introduced to the PA General Assembly in 2015-16 aimed at increasing the state’s minimum wage. The three that CAAP tracked the closest in 2015-2016 were House Bill (H.B.) 250 by Representative Patty Kim and Senate Bills (S.B.) 195 and 197 by Senator Christine Tartaglione. H.B.250 would have set the minimum wage to $9.00 per hour 6 months after passage and to $10.10 per hour 12 months after passage. H.B.250 would also set the tipped minimum wage to 75% of the minimum wage 12 months after passage. S.B.195 would have set the minimum wage to $8.67 per hour 6 months after passage and $10.10 per hour 6 months later. S.B. 197 would have increased the minimum wage to an annual cost-of-living adjustment calculated by applying the percentage change in the most recent officially reported Consumer Price Index. This avoids future years of decline in purchasing power.
Unfortunately, H.B.250 and S.B.195/197 were “discharged” from consideration in late 2015. For the last time in 2016, the Senate will reconvene on November 16 and the House on November 14-15, but it is unlikely that anything related to minimum wage will be discussed. The goals of all three bills were to see an increase of the minimum wage to $10.10/hour by 2016. In 2017, CAAP hopes to see a revitalization of momentum for these important endeavors and a refiling of bills by Representative Kim and Senator Tartaglione. The bills would receive a new number, but we hope the language remains consistent. Of course, 2017 will mark the beginning of a difficult budget season which could derail efforts, as was the case when 2015-16 minimum wage efforts started off very positive in 2015 but got lost in the state budget crisis of 2015 and national/state/local elections of 2016.
As you meet with House and Senate members, CAAP encourages member agencies and the public to continue to discuss the importance of increasing our state’s minimum wage for low-income families. You can cite H.B.250 and S.B.195 and 197 as specific examples of recent efforts and use the goals of those past bills as reference for what we hope to accomplish in 2017. Let your representative know that as new minimum wage bills are introduced next year, you will be asking them to sponsor similar legislation to what was attempted in 2015-16.
Below are a few reasons why CAAP believes increasing the minimum wage to at least $10.15 per hour is an important step in helping low-income families to self-sufficiency. Feel free to use these talking points:
• A full-time, year-round worker earning the current minimum wage earns less than the federal poverty threshold for a family of two
• Increasing the minimum wage to $10.15 per hour is estimated to directly and indirectly affect over one million members of Pennsylvania’s workforce of over 5.9 million people. This would mean 160,000 fewer people living in poverty in Pennsylvania and less dependence on government assistance programs
• People with cash in hand spend on local goods and services. Cash in hand empowers low-income people by allowing them to directly provide for themselves and their families
• Empowering employees with better wages increases productivity and decreases turnover, and increasing purchasing power for low-wage workers means more customers for Pennsylvania businesses
• Governor Wolf signed an executive order that raises the minimum wage to $10.15/hour which ensures employees under the governor’s jurisdiction will be paid no less than $10.15 an hour
• Increasing the minimum wage to $10.15 per hour has the potential to generate nearly $60 million in tax revenue. The increase could generate up to $15 million in additional personal income tax (PIT) revenue. Nearly $45 million in additional sales tax revenue could be generated through additional personal spending on taxable goods
• According to a briefing paper by the Economic Policy Institute (EPI) on the effects of increasing the minimum wage by state, increasing the minimum wage would impact over half a million children, whose parents would be among workers affected by the increase
• EPI’s estimate of the additional wages generated in Pennsylvania by a minimum wage increase was distributed by income level using actual Pennsylvania tax data. The personal income tax impact was estimated for each income level, adjusting for tax forgiveness and losses in business income attributable to the minimum wage increase. It was assumed that a portion of the additional wages attributed to the increased minimum wage would be available for spending on taxable goods. The portion spent on taxable goods at each income level was computed based on data from the Consumer Expenditures Survey and additional sources
• CAAP is very cognizant of the “cliff effect”. Briefly, the “cliff effect” is a phenomenon that happens when families in poverty begin to earn more and consequently become ineligible for government assistance programs at a time when they still need help. This can return low-income families back below poverty levels or incentivize them to avoid raises or job growth due to fear of losing vital assistance, especially when the assistance is more valuable than the next 2-3 earning increases. However, if their income is sufficient to make ends-meet, the cliff effect would be neutralized