8.4 Million To Get Minimum Wage Hike Jan. 1, But Not In PA

PENNSYLVANIA — Pennsylvanians will not see an minimum wage increase in 2023, but some 8.4 million Americans will, according to a new analysis from the Economic Policy Institute.

That's because Pennsylvania has a statute that keeps its minimum wage in line with whatever the federal minimum wage is. So while the minimum wage will rise in 23 states and Washington, D.C. on New Year’s Day as new laws and updated wages take effect, Pennsylvania's 63,800 minimum wage workers will take home the same amount of money.

Despite inflation and scores of studies demonstrating that minimum wage does not get most people out of abject poverty, Pennsylvania's minimum wage remains at $7.25 an hour, with a tipped wage of $2.83 an hour.

Raising that has been a crusade of Democrats in Pennsylvania for years, including Gov. Tom Wolf, who in early 2022 called it "an insult to Pennsylvania workers."

"The gap between us and other states keeps growing, it's apparent," he said.

In 2020, Gov. Wolf proposed a graduated raise of the wage in Pennsylvania, which would have seen the minimum bumped to $12 an hour last year, with small increases each year until $15 was reached in 2026. He made similar formal proposal seven times while he was in office, and legislation was introduced every year. It never made it far in the Republican dominated legislature, which has consistently eschewed the effectiveness of the idea and argued it would harm the economy.

But other states have not taken economic blows after raises, and, meanwhile, typical workweeks are nearly impossible for those looking to obtain basic shelter in the Keystone State. More than 100 hours a week are required in some areas for individuals making the minimum wage of $7.25 an hour, data from the National Low Income Housing Coalition shows.

Fair Market Rent for a two bedroom apartment in the state is $1,087 (it's $882 for a one bedroom). Even though this is just the 27th highest rate in the nation, it still means that a minimum wage worker would need to work 115 hours a week for a two bedroom and 94 hours a week for a one bedroom.

If an individual works just 40 hours a week, in order to afford the Fair Market Rent they'd need to make at least $20.90 an hour, or $43,463 a year.

Findings of the Economic Policy Institute

Nationally, wages will increase by about $5 billion total, with annual earning increases of about $150 in Michigan to $937 in Delaware, according to the report from the Economic Policy Institute.

The Economic Policy Institute, a Washington, D.C.-based nonpartisan, nonprofit research group that regularly tracks changes in the minimum wage, said its report reflects disparity in pay across the country, especially among women and workers of color, who make up the majority of low-wage employees.

When the changes take effect, the state with the highest minimum wage will be Washington, with a starting hourly rate of $15.74.

In some cases, wage increases were prompted by inflation-linked adjustments. In others, they were automatically triggered by state law or by legislative action. In Washington, D.C., the tipped wage goes up by 65 cents due to a successful midterm election ballot measure calling for the elimination of the tipped wage by 2027.

Additionally, 27 cities and counties, primarily in California, will increase their minimum wages on Jan. 1, which the Economic Policy Institute said will further increase the number of workers who are likely to see bigger paychecks in 2023.

The Economic Policy Institute said that because of long-standing discrimination and occupational segregation, the most concentrated effects are seen among:

• Hispanic or Latino workers, 21.8 percent (20.1 percent of the workforce);
• Black workers, 12.2 percent (9.5 percent of the workforce);
• Multiracial and Native American workers, 14.4 percent (2 percent of the workforce).

The think tank said in its release that 23.2 percent of affected workers have incomes below the poverty line, and another 26.5 percent have incomes below twice the poverty line.

Other highlights from the report:

• About 55 percent of affected workers are those 25 and older, and nearly half (45 percent) work full time. Most of the affected workers have a high school diploma or less education, but about 41 percent have at least some college.
• More than 2 million parents will get a raise, including more than 1 million single parents. It’s estimated more than 5.7 million children live in households that will see an increase in earnings in 2023.
• The smallest increase will be in Michigan, where the minimum wage goes up 23 cents to $10.10 an hour.
• The biggest rate hike is in Nebraska, with a $1.50 an hour increase to $10.50 an hour.

The federal minimum wage remains at $7.25 for non-tipped hourly workers, and the tipped-wage minimum is $2.13 per hour.

According to a separate report from the Economic Policy Institute, more than a dozen states pay non-tipped employees at that rate. Among those states, some have increased the tipped wage above the federal minimum, notably in North Dakota and Iowa, where the minimum tipped wages are $4.86 and $4.35 an hour, respectively.

Two states — Wyoming and Georgia — have minimum wages below the federal minimum, at $5.15 each. Wyoming’s tipped wage minimum is $2.13 an hour, and Georgia hasn’t established one.

Alabama, Louisiana, Tennessee, Mississippi, South Carolina and Tennessee don’t set minimum wages.