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June 21, 2023

Pennsylvania House passes bill to raise minimum wage to $15 by 2026

If passed in the Senate, tipped workers would also see a pay increase, to 40% of the minimum wage

Pennsylvania's minimum wage, which has remained stagnant for 14 years, could be increased to $15 by 2026 under a bill passed by the Pennsylvania House on Tuesday night. 

The bill, introduced last month by Rep. Jason Dawkins and Rep. Patty Kim, would gradually raise the state's minimum wage over the next three years, beginning with a jump to $11 per hour in 2024, $13 per hour in 2025 and $15 per hour in 2026. After that, the minimum wage would be permanently indexed for inflation with annual cost-of-living adjustments, officials said.

In a co-sponsorship memo, Dawkins and Kim, both Democrats, noted that Pennsylvania's neighboring states have seen minimum wage increases, with New Jersey and Delaware following a similar method of gradual increases each year to reach $15 per hour by 2024 and 2025, respectively. 

"It's about time," Dawkins said. "No more games and no more waiting; the people of Pennsylvania deserve a minimum wage that is fair and competitive with our neighboring states. There's still a lot of work to do, but I'm pleased with the direction we're headed. Raising the minimum wage will raise the wage of more than a million people in the commonwealth, improve people's financial security and grow the state's economy." 

The bill passed with a vote of 103-100, mostly along party lines. It heads to the Senate under a companion bill introduced by Sen. Dan Laughlin, a Republican from Erie County.

Pennsylvania's tipped minimum wage — the base wage paid to employees whose compensation mostly comes from tips — has remained stagnant at $2.83 per hour since 1997. Last summer, Pennsylvania took aim at the tipped minimum wage, ensuring that only workers who earn at least $135 per month in tips would see their base wage dropped to the tipped rate. 

The House bill set the tipped minimum wage to 60% of the minimum wage. The Senate bill is largely the same as its counterpart in the House, though it would set the tipped minimum wage to 40% of the minimum wage.

"I have heard from my constituents and have listened to both sides of the political aisle," Laughlin said when his bill was introduced last month. "Pennsylvania has not seen the minimum wage increase since it was hiked at the federal level in 2009. On average, a person who earns minimum wage will only earn $15,000 per year. Due to the rising costs, workers are unable to pay for basic necessities and forced to rely on public assistance. It is time we address the issue and I believe this bill is the most responsible way to approach it." 

The bill faces opposition in the Republican-controlled Senate, with Senate Majority Leader Joe Pittman telling the Inquirer that $15 per hour is "not reasonable and not viable." 

30 states have a higher minimum wage than the federal minimum wage of $7.25 per hour, according to the U.S. Department of Labor, while 15 states have tied their minimum wage to the Consumer Price Index or other measures to allow it to increase gradually with inflation. Though Pennsylvania's tipped minimum wage is higher than the $2.13 per hour federal rate, 29 states have a higher tipped minimum wage than Pennsylvania. 

Several Pennsylvania businesses have increased their minimum wage to $15 per hour or higher over the past several years, according to the National Employment Law Project. These include HipCityVeg, Rivers Casino, WellSpan Health, Rutter's, Klavon's Ice Cream Parlor, Evangelical Community Hospital and Geisinger. 

"Paying employees a fair wage is good business," said Amy Edelman, owner of Night Kitchen Bakery in Chestnut Hill. "Employees who aren't continually stressed about making ends meet can focus on taking care of our customers and producing delicious baked goods, which translates into the returning customers that drive small business success. Raising Pennsylvania's minimum wage will boost spending at local businesses and create a better economy for everyone." 

Gov. Josh Shapiro celebrated the passage of the House bill on Tuesday night, tweeting that Pennsylvania "can't compete with other states when they offer to pay workers more." The governor previously signaled support for raising the minimum wage when he was a candidate, along with better job training and workforce development. 

After Laughlin's minimum wage bill was introduced late last month, it was referred to the Senate Committee on Labor and Industry, where it will receive hearings and a vote before being put before the full Senate later this year. If passed, Shapiro is expected to sign it into law.