RESTORING THE VALUE OF WORK: Increase the Minimum Wage to $10.70 per Hour

By Robert M. McCord

Today, too many Pennsylvanians find themselves working twice as hard to get half as far. Rob McCord wants to swiftly lift thousands of families out of poverty by raising the minimum wage to $10.70 during his first year in office (the boldest plan put forth by any candidate) - and to $11.60 within 10 years. He also wants to raise the tipped minimum wage from $2.83 per hour to $5 (the first such increase since 1998).

Part of the problem is that the minimum wage has not kept pace with the rate of inflation, which has diminished the purchasing power of thousands of families across our commonwealth.

As governor, Rob McCord wants to swiftly lift thousands of families out of poverty by raising the minimum wage to $10.70 during his first year in office - and to $11.60 within 10 years. He also wants to raise the tipped minimum wage from $2.83 per hour to $5 (the first such increase since 1998).

In comparison to other proposals, McCord's plan not only lifts more families out of poverty sooner, it restores the value and dignity of work for those who desperately want to work and avoid collecting government assistance.

The Plan

• Raise the minimum wage to $10.70 in 2015, with subsequent increases of $0.10 per year through 2024 after which the minimum wage would increase annually by an amount equal to inflation.
• Raise the "tipped minimum wage" from $2.83 to $5.00 in 2015 with the first 10 years increasing by 10 cents each year and at the rate of inflation every year thereafter.
• Preserve the minimum wage of $7.25 per hour for employees who are also students, but index that rate to inflation.

• Approximately 195,000 Pennsylvania workers who earn the minimum wage or less, 66% of whom are women and 40% of whom are parents.
• More than 140,000 tipped workers, 78% of whom are women and 10% of whom are single parents.

Only a single-earner household, working full-time at the current minimum wage is able to live above the federal poverty rate. If that worker is married to someone who is unemployed or if that worker has one or more children, the worker and his or her family would live below the federal poverty level.

In its first year, Rob McCord's proposed minimum wage would immediately lift all households of three or fewer people with one minimum wage worker above the poverty line. It's worth noting that this would cover the vast majority of households with workers earning the minimum wage or less. Even in subsequent years, with the addition of the annual 10-cent adjustment in each year of the following decade, McCord's plan is expected to keep all of these households out of poverty.

Compensating for Inflation

The purchasing power of the minimum wage has fallen significantly since its historical high in 1968 due to inflation, according to the Pennsylvania Department of Labor and Industry.

To keep pace with inflation, the nominal rate of $1.60 at that time would need to equal about $10.70 today. Rob McCord wants to restore the purchasing power of the minimum wage to that level immediately and provide annual increases of $0.10 per year through 2024. After 10 years, with the rate at $11.60 per hour, subsequent yearly increases would be pegged to the rate of inflation so working families don't continue to fall behind.

McCord's plan would also raise the tipped minimum wage, which has not increased in 16 years, to $5 an hour, with an increase of $0.10 per year over 10 years. After that, the wage would increase at the rate of inflation.

Competing Proposals

McCord's plan is the only proposal that would immediately lift one- to three- person households with a full-time minimum wage earner out of poverty in its first year.

This is particularly important because, according to L&I, there were 16,000 single parents who earned the minimum wage or less as of 2011, with 3,700 of those workers having two children.