After newly-elected Governor Josh Shapiro raised the issue in his budget address, some are renewing efforts to enact a $15 minimum wage in Pennsylvania. Activists and lawmakers have tried to push the Fight for $15 for years in the Commonwealth, but have been blocked by concerns over the damage it could cause the state in jobs and earnings for employees.
Those concerned about the negative impacts are on to something: economic research shows more than doubling Pennsylvania’s minimum wage (and tipped minimum wage) could cost hundreds of thousands of employees their jobs and even more in lost earnings and shuttered businesses.
A $15 Regular Minimum Wage alone would worsen the economic outlook in Pennsylvania for employees and consumers.
- Estimates by Miami and Trinity University economists find this could cost Pennsylvania up to 143,402 jobs for minimum wage earners.
- More than half (52%) of losses would be for teenagers aged 16-19.
- A majority of losses (59%) would be for women.
- A majority (62%) of American labor economists oppose a $15 minimum wage, citing effects of reducing jobs for teens (75%) and entry-level positions (67%), and negative impacts on small businesses (81%).
- 58 percent agreed a $15 minimum wage will contribute to existing inflation.
- 60 percent agreed a $15 minimum wage would not be efficient to addressing poverty.
- The overwhelming majority of 30 years of research on minimum wages finds increasing minimum wages causes employment loss.
A $15 tipped minimum wage, removing Pennsylvania’s current tip credit, would cause even more harm for workers in affected industries such as restaurants.
- Job losses:
- Miami and Trinity University economists find tip credit elimination alone could cost up to 17,022 tipped positions in Pennsylvania.
- Three out of four American labor economists agree eliminating tip credits (and raising the tipped minimum wage) will reduce the number of jobs available.
- A University of California-Irvine study finds every $1 increase in the tipped minimum wage results in a 6.1% decrease in tipped employment.
- Tip reductions:
- A Cornell University study finds that as tipped minimum wages increase, the percentage customers tip in full-service restaurants decreases.
- Data from Toast on restaurant transactions found states that scrapped the traditional tip credit system such as California and Washington had some of the lowest tipping percentages in the nation.
- Earnings losses:
- A University of California-Irvine study finds every $1 increase in the tipped minimum wage results in a 5.6% decrease in tipped employee earnings.
- Miami and Trinity University economists find tip credit elimination could cost tipped employees $109 million in total earnings statewide, and up to $7,500 annually for tipped workers’ families.
- Restaurant closures:
- Harvard Business School researchers estimate that for every one-dollar increase in the tipped minimum wage, restaurants were 14 percent more likely to shut down.