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BLOG: Five Ways a Minimum Wage Increase Improves Economy

By: Sophie Stone, Deputy Press Secretary

March 14, 2016

Last week, as part of his “Jobs That Pay” initiative, Governor Tom Wolf signed an executive order that ensures employees under the governor’s jurisdiction will be paid no less than $10.15 an hour. Governor Tom Wolf is now calling upon Pennsylvania legislators to pass a minimum wage increase for all Pennsylvania workers.

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The increase would benefit more than 1.2 million Pennsylvania workers, many of whom are adults with families. But a minimum wage increase would also jolt Pennsylvania’s economy.

Here’s five ways a minimum wage increase will improve the economy:
  1. Creates New Jobs and Supports Local Businesses: By increasing the purchasing power of consumers, people will spend more at local businesses which creates new jobs.
  2. Boosts State Revenue: A minimum wage increase to $10.15 per hour would boost state revenue by roughly $60 million annually.
  3. Increases Productivity and Morale: An increase in the minimum wage will lead to increases in employee morale, productivity, and quality of work and decreases in turnover and the cost of training and supervision.
  4. Increases Purchasing Power: The current minimum wage of $7.25 per hour has 18 percent less purchasing power than the minimum wage had in 1979. Raising the minimum wage puts money in the pockets of workers who most need to spend it.
  5. Reduces Poverty: An increase in the minimum wage would reduce poverty statewide by 9%. This would mean 160,000 fewer people living in poverty in Pennsylvania and less dependence on government assistance programs.

The facts are clear. Raising the minimum wage is not just the right thing to do. It’s a smart economic decision as well. It’s time for the Pennsylvania House and Senate to pass legislation to give Pennsylvania workers a raise.

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