Philadelphia’s minimum wage has been stuck at $7.25 an hour since 2009 – here’s why efforts to raise it have failed
Retrieved on:
Friday, April 5, 2024
In Philadelphia, the poorest big city in the U.S., the minimum wage has been stuck at $7.25 per hour for the past 15 years.
Key Points:
- In Philadelphia, the poorest big city in the U.S., the minimum wage has been stuck at $7.25 per hour for the past 15 years.
- That’s the minimum wage everywhere in Pennsylvania, and it matches the federal minimum wage.
- However, minimum wage workers in other big American cities earn significantly more: $16 an hour in New York and $15 an hour in Boston, for example.
Why is Philly’s minimum wage so low?
- The biggest factor is that Philadelphia does not have the authority to create its own minimum wage – one that could appropriately reflect the city’s cost of living.
- Pennsylvania does not allow local governments to raise the minimum wage above the state level of $7.25 an hour.
- In June 2023, Pennsylvania’s Democratic-controlled House passed a bill to raise the minimum wage statewide incrementally to reach $15 an hour by 2026, but it stalled in the Republican-controlled Senate.
How many Philadelphians make minimum wage? What sort of jobs are these?
- As of 2018, roughly 9% of employed Philadelphians age 16 or older made $7.25 an hour or less.
- In fact, in Philadelphia, only 7% of workers earning minimum wage are teens.
- Philadelphians who make minimum wage or less tend to be employed in four sectors: hotel and food services, retail trade, health care and social assistance, and educational services.
- Geographically, they’re most concentrated in North, Northeast and Southwest Philadelphia — areas that are traditionally lower income.
Who does this most hurt?
- In 2018, nearly 4 in 10 Pennsylvanians struggled to pay for basic expenses.
- Many families get stuck in a cycle of poverty even while adults are working full time.
- This limits the resources the city has to invest in infrastructure, clean streets, parks and other public places and services.
Who most benefits?
- The less they have to pay staff, the more money stays in their coffers.
- But that’s a shortsighted stance that doesn’t take into account the larger financial implications a low minimum wage creates: primarily, the high cost of employee turnover.
- Recent studies have shown that the average cost of turnover is 40% of a position’s annual salary.
What would be needed for Philly to raise its minimum wage?
- To expand this to all workers, Philly would need to be given the power to make change for itself and not be beholden to Harrisburg’s decision on minimum wage.
- Responding to a nonbinding ballot question in 2019, Philadelphia voters voiced overwhelming support for a $15-an-hour minimum.
- This is how other cities like Washington and Tacoma, Washington, that eventually passed an increased minimum wage, began their efforts.
- His work has been funded by Comcast NBCUniversal Foundation, The Neubauer Family Foundation, Robert Wood Johnson foundation, The Philadelphia Department of Public Health, The Independence Public Media Foundation, and The Commerce Department for The City of Philadelphia.
- Alicia Atkinson works for the Wealth and Work Future Lab at the Lindy Institute through Drexel University.