Pennsylvania could see $15 minimum wage by 2026

As workers wait for the full Pennsylvania House to vote on whether to increase the state minimum wage, one economist said the increase would be a step in the right direction, but should happen sooner.

This week, a House committee passed House Bill 1500, which would raise the minimum wage from $7.25 to $15 an hour by 2026.

Stephen Herzenberg, executive director of the Keystone Research Center, pointed out it would increase the hourly wage more slowly than what has been proposed by Gov. Josh Shapiro. He added states bordering Pennsylvania have already taken steps to increase workers’ pay before 2026.

“New York and New Jersey are already scheduled to get to $15 an hour by January 1st of next year; they’re already over $14 an hour,” Herzenberg noted. “The fact that Pennsylvania workers would have to wait a couple more years is a modest increase.”

However, Herzenberg thinks it is important for the bill to pass, despite opposition from some Republican lawmakers. He stressed it has been 14 years since the last minimum wage increase. If the bill becomes law, the minimum wage would increase to $11 per hour in January 2024, and $13 in 2025.

Herzenberg does not believe a higher minimum wage would have negative employment effects in the state. He reported new research found some Pennsylvania workers are already crossing into border states to get better-paying jobs. The research looks at a nine-year period from 2013 to 2022, and shows an uptick in employment in New York, in the broad low-wage sector including restaurants.

“You see 50% increase in wages, inflation-adjusted wages, in the leisure and hospitality industry in New York, only 10% in Pennsylvania,” Herzenberg outlined. “But you also see the number of jobs in that industry growing faster in New York.”

He is convinced raising the minimum wage would help boost jobs and earnings, and would allow workers to better support their families and spend more at local businesses.