A Senate bill that would increase Pennsylvania’s minimum wage to $9.50 an hour by 2021 was voted out of committee Tuesday and could be taken up by the full Senate as early as Wednesday.
The current minimum is $7.25 an hour — matching the federal minimum.
The proposed rate is a compromise by Gov. Tom Wolf, who has sought an increase to $15 an hour. In exchange for Senate support for raising the minimum, Gov. Wolf will drop plans to expand eligibility for overtime pay for low level managers.
“It’s a start,” said Sen. Christine Tartaglione, a bill sponsor and Democrat from Philadelphia. “I couldn’t walk away from a $2.25 an hour raise. That could change a whole lot of families’ histories.”
Ms. Tartaglione said the full Senate could take up the bill as early as Wednesday.
The bill was voted out of the Senate Labor and Industry Committee Tuesday. In a prepared statement, Sen. Camera Bartolotta, a Republican from Monongahela, praised the legislation as a compromise.
“I believe most people feel comfortable in raising the minimum wage, but not to an astronomical amount where it would disrupt small businesses across Pennsylvania,” said Ms. Bartolotta, who chairs the Senate Labor and Industry Committee. “The legislation, which moves to the full Senate for a vote, reflects a reasonable agreement among stakeholders.”
More than 500,000 Pennsylvanians would benefit from the wage increase, according to Stephen Herzenberg, executive director of the Keystone Research Center. Still, he said the compromise falls short.
“This will benefit a lot of Pennsylvania families that really need help,” said Mr. Herzenberg, who is also an economist. “But it doesn’t help nearly as many as the governor wanted to help.”
With unemployment at historic lows, employers have been forced to raise entry pay to attract applicants. Online shopping giant Amazon raised its minimum pay to $15 an hour last year while Walmart pays $11 to start and Sheetz, $10.
McCandless-based Vincentian Collaborative System recently said it would raise its minimum starting wage to $15 an hour by July 2021. The continuing care retirement community employs about 300 people at its McCandless campus, but had 55 to 60 openings that were difficult to fill, said President and CEO Nick Vizzoca.
“There’s already a workforce shortage,” Mr. Vizzoca said. “This is an investment in our employees.”
Vincentian’s dietary workers, which are among the hardest positions to fill, start at $12; the starting pay for cooks is $13.50.
In 2015, Pittsburgh Mayor Bill Peduto by executive order to increase the starting wage for city employees to $15 by 2021. Health system giant UPMC, the biggest employer in Pennsylvania, has also promised to raise starting salaries to $15 an hour by 2021.
Others were less certain of the benefits of the legislation.
Jezree Friend, senior government relations representative at the Manufacturer and Business Association, an Erie-based trade group, said the bill doesn’t account for differences in the cost of living around Pennsylvania.
“Places like Philadelphia are very different from places like Warren County,” he said. “It just doesn’t work in these rural areas.”
Gov. Wolf’s plan to hike the salary threshold for overtime pay eligibility over three years to $45,500 from the bottom federal limit of $23,660, which was scheduled to go into effect in January, will be withdrawn as part of the wage compromise, said Rick Bloomingdale, president of the Pennsylvania AFL-CIO, adding he was disappointed the new minimum wage wasn’t higher.
Employees are entitled to time and a half pay for every hour worked over 40 hours per week — who are classified as nonexempt — unless they have supervisory or administrative responsibilities and meet the minimum income threshold. Expanding the overtime threshold would increase the number of workers who would be eligible for overtime pay.
The Pennsylvania Chamber of Business and Industry, which had opposed raising the minimum wage, viewed Senate Bill 79 as an acceptable tradeoff for Gov. Wolf dropping the overtime eligibility expansion.
“Overall, it’s a compromise that we’re not opposing,” said Alex Halper, director of government affairs at the Harrisburg-based agency. “It was a significant concern for many employers and stopping it has been a top priority for us.”