Gov. Shapiro wants to raise Pa.’s minimum wage to $15. Will a changing Harrisburg make it happen?

Gov. Josh Shapiro urged lawmakers Tuesday in his budget address to more than double the state’s minimum wage to $15 per hour to address a national worker shortage.

Speaking directly to Republicans at a joint session of the House and Senate, Shapiro asked GOP lawmakers to work with him so Pennsylvania can join nearby states that have already raised their hourly rate above the federal minimum of $7.25.

Democrats, who have previously tried to raise the state’s minimum wage, cheered Shapiro’s proposal.

Democrats control the House by a razor-thin margin, and top leaders have said raising the minimum wage is one of their top priorities for this legislative session. Former Gov. Tom Wolf tried unsuccessfully in many of his budget proposals to get the GOP-controlled General Assembly to raise the minimum wage.

However, GOP leaders seemed to soften last legislative session when Senate Republicans expressed interest in raising the wage and considered legislation to increase it — though they proposed more modest rates than Shapiro’s $15-per-hour pitch.

“This feels like one of those fights that’s gripped our politics for so long that some people on the other side don’t even know why they’re opposing Pennsylvania workers anymore,” Shapiro said.

No legislation has been considered yet to raise the minimum wage to Shapiro’s requested $15-per-hour rate. House Democrats will likely pass an increase in the coming months, but negotiations with Senate GOP leaders might not take place until budget talks get underway later this year.

Pennsylvania is one of 20 states where the minimum wage is no higher than the federal minimum of $7.25 per hour, which was set in 2009. Every state that borders Pennsylvania has already raised its minimum wage.

When looking at Pennsylvania’s minimum wage compared with cost of living, Philadelphia is one of the U.S. cities where it’s most difficult for minimum-wage workers to make ends meet, a recent study by the personal finance website SmartAsset found. The study calculated a “real minimum wage” for each city, and Philadelphia’s was the fourth lowest in the country.

The number of Pennsylvania workers who make at least $15 per hour has been on the rise in recent years — nearly 70% of Pennsylvania hourly workers made at least that much in 2022, according to a report by the Pennsylvania Department of Labor & Industry.

Just 2% of Pennsylvania hourly workers were paid at or below the federal minimum wage in 2022, the report said, while 12.8% were paid between $7.25 and $12 per hour.

For just under 1 million people who made less than $15 per hour last year, Shapiro’s proposal would mean an increase in pay.

Nearly half of Pennsylvania’s minimum-wage workers last year were in the food and drink industry, the state Labor Department’s report said.

Members of the Pennsylvania Restaurant & Lodging Association have been increasing wages to recruit employees amid a worker shortage, said Ben Fileccia, PLRA’s senior vice president for strategy and engagement, and the majority of tipped workers in the industry make more than minimum wage.

”We appreciate the governor’s focus on workforce development initiatives as restaurants and hotels, like most business in Pennsylvania, struggle with recruiting new employees,” Fileccia said. “PRLA will continue to engage our membership on this topic.”

Those who are employed in retail trade and educational services also make up a significant share of minimum-wage workers in Pennsylvania.

Support staff currently make less than $15 per hour at many Pennsylvania schools, said Chris Lilienthal, assistant director of communications for the Pennsylvania State Education Association.

The proposed change is likely to be most challenging for early-stage businesses with just a few employees, particularly if they have to keep prices low to compete with larger businesses, said Karl Kraus, interim director of the Small Business Development Center at Temple University.

It would be less challenging if Pennsylvania phased in the new wage over a period of several years, as New Jersey did, Kraus noted. The New Jersey Legislature and Gov. Phil Murphy worked together to pass legislation in 2019 that would gradually raise the minimum wage to $15, at a rate of roughly one dollar per year. It’s now at $14.13.

Some small businesses have already been moving toward the $15 mark because of pressure in the hiring market or because of “ethical [and] social pressure,” Kraus added, sometimes forgoing profits to do so. “They’re doing what is right in their mind, but it’s putting a pressure on the business.”

Business associations and chambers of commerce have frequently lobbied against raising the minimum wage to $15 per hour, arguing that it will harm small business and ultimately result in jobs being eliminated.

The Pennsylvania Chamber of Business and Industry, for example, states on its website that the organization has “resisted” legislation to increase the minimum wage, but the organization stopped short of criticizing Shapiro’s budget on Tuesday.

“The business community has traditionally expressed concerns with government-mandated wages due to the direct impacts and potential unintended consequences on small businesses, employment, and inflation,” Jon Anzur vice president, public affairs for the Pennsylvania Chamber, said in an email. “The governor’s speech today was an important first step in a long budget process, and we will be closely analyzing his proposal as we get more details.”

The Chamber of Commerce for Greater Philadelphia put out a statement Tuesday praising Shapiro’s budget address as “a positive step forward,” but a spokesperson for the chamber declined to provide comment on the minimum-wage proposal.

Danny Bauder, president of the Philadelphia Council AFL-CIO, said he appreciates Shapiro’s commitment to the minimum-wage issue, since the governor had campaigned on that promise last year. While many union members in the Philadelphia area already make more than $15 per hour thanks to their contracts, Bauder said, “raising that floor” on compensation will help all workers, particularly in the service sector.

“This raises the standard of living for all Pennsylvanians,” Bauder said.

Wendell Young, president of the United Food and Commercial Workers Local 1776, pointed to the benefits of workers having more money to spend in the community.

“First of all, it’s a crime that Pennsylvania’s minimum wage hasn’t been raised from $7.25 an hour since 2006, we are glad to see Gov. Shapiro’s proposal and certainly support it,” Young said in an email. “Although most of our members already make that or more, it could raise the start rate for our part-time members and entry level workers.”

“Pennsylvania is way behind the rest of the country on minimum wage,” Rosslyn Wuchinich, president of Unite Here Local 274, which represents hotel and food-service workers. Shapiro’s proposal would affect many workers in that industry, she noted.

While the PSEA supports the proposed minimum wage, the organization has also called for a larger pay increase for school support staff, including paraprofessionals, custodians, and cafeteria workers, bringing their minimum pay to $20 per hour. Lilienthal said such roles need to offer better wages than other industries.

“They might come to the conclusion that they could make more money working at Target or at Costco,” he said. “We want to keep them in the classroom working with students.”

The SEIU Pennsylvania state council also wants to take Shapiro’s proposal a step further, by changing state law so local governments within Pennsylvania can increase minimum wage within their own boundaries without state legislation. Philadelphia City Councilmembers Mike Driscoll and Jim Harrity recently raised this issue as well.

“This common-sense step allowed in 25 other states would allow local elected leaders to respond in real time to the needs of their communities, businesses, and voters,” the SEIU council said in a release Tuesday. “Most importantly, it would mean that communities would not have to suffer through another 17 years of legislative inaction.”