38 Economists Endorse Tartaglione’s Proposal to Raise PA’s Minimum Wage

The $15 minimum wage proposal crafted by Senator Tartaglione in partnership with Governor Wolf has earned the endorsement of 38 economists and social scientists, who have co-signed a letter calling for a “bold increase” in Pennsylvania’s outdated minimum wage.

The economic researchers and analysts represent academic institutions from throughout the Commonwealth and across the nation, as well as the Washington, D.C., based Economic Policy Institute and Harrisburg-based Keystone Research Center.

Senator Tartaglione will soon introduce Senate Bill 12 which would raise Pennsylvania’s minimum wage from $7.25 per hour to $12 this year, followed by annual raises of 50 cents until it reaches $15 by 2025. Thereafter, the minimum wage would be linked to automatic annual cost of living adjustments. The legislation would also eliminate the sub-minimum wage, which allows employers to pay as little as $2.83 per hour to certain categories of workers, such as tip-earners, those with disabilities, trainees, and students.

The economists stated that the new minimum wage proposal would directly lift the wages of 1.5 million Pennsylvanians by 2025, in addition to another 500,000 who make just above $15 now and would likely receive a pay raise as their employers adjust internal wage scales.

Adjusted for inflation, today’s minimum wage workers in Pennsylvania earn 29 percent less per hour than their counterparts did 50 years ago, although worker productivity has doubled in Pennsylvania in that time. The purchasing power of the federal minimum wage has been eroding for just as long. Its value peaked in 1968 at an inflation-adjusted rate of $10.15 per hour relative to 2018 dollars.

Low Wages Are a Significant Factor in Chronic Public Health Problems

Wage stagnation at the low end of the pay scale is not just an economic problem for Pennsylvania and the entire country. Researchers are finding that it’s also a major public health concern according to a recent article in New York Times Magazine.

Numerous published studies from the academic and scientific communities have drawn direct correlations between low wages and heightened public health problems. These medical and social concerns include poor nutrition, chronic stress, lack of sleep, smoking, low self-esteem, alcohol and substance abuse, maternal health problems, teen pregnancy, low-weight babies, child neglect, tumor growth, and premature death.

“These studies show the positive externalities of increasing  the minimum wage on serious outcomes, like reducing child abuse,” said Lindsey Bullinger, an assistant professor from Indiana University who found in 2017 that raising the minimum wage by $1 would reduce child neglect reports by almost 10 percent.

There’s common sense behind the findings. People who earn low wages often work longer hours or multiple jobs to make ends meet. They often don’t sleep enough or eat right. They may not have enough money to shop for healthy foods or time to cook. Also, many of them lack adequate healthcare or they don’t take time to seek treatment for non-critical health complaints.

Often, children of low-wage workers don’t receive the supervision or attention they need to thrive because the parents are working outside the home.

On the other hand, according to the Times, “A $15 minimum wage is an antidepressant. It is a sleep aid. A diet. A stress reliever. It is a contraceptive, preventing teenage pregnancy. It prevents premature death. It shields children from neglect. … Modest wage increases have a profound impact on people’s well-being and happiness.”

Right to Work Groups Keep Suing as PA Union Membership Stays Strong

In the aftermath of last year’s U.S. Supreme Court case that established a new right-to-work precedent for public sector employees, conservative groups that funded the case have turned to Pennsylvania and other states to encourage and support what The Inquirer described as “a wave of lawsuits … to find other potential legal weaknesses in how unions operate.”

There have been at least nine relevant lawsuits filed on behalf of Pennsylvania workers against public-sector employers and/or unions since the June 2018 Janus vs. AFSCME decision. In one case, a school bus driver sued his employer and union for collecting dues from him after Janus. In another, a group of Erie utility workers is suing their union alleging poor representation. In another ongoing class action suit that predated Janus, teachers are alleging that their unions were illegally collecting fees.

“Although some of the suits have been settled with unions refunding dues or fees to plaintiffs, no judge has issued a precedent-setting opinion on any Pennsylvania case,” the news agency reported.

One source described by the paper as “a watchdog for anti-union activity” said that one of the reasons right-leaning organizations have ramped up their legal efforts is that the campaign to convince members to quit their unions has not produced its desired effect.

The Pennsylvania State Education Association has lost about 1,200 members, but continues to represent 142,300. The School District of Philadelphia reported that about 600 dues-paying members have defected from the five unions that still represent about 18,000 district employees.

Union officials said their organizations remain attractive to workers because they continue to advocate for workers’ rights like a higher minimum wage and better healthcare access. With about 700,000 residents who are union members, Pennsylvania ranks fourth among U.S. states, trailing only California, New York, and Illinois, according to the U.S. Bureau of Labor Statistics.

Franchisors Settle “No Poach” Allegations as DOJ Suggests Lenient Antitrust Enforcement

Pennsylvania Attorney General Josh Shapiro and 13 other state attorneys general have reached a settlement with four national restaurant franchisors by which the companies agreed to stop using “no poaching” clauses that restrict the movement of employees from restaurant to restaurant.

Arby’s, Dunkin’, Five Guys, and Little Caesars signed onto the agreement, which follows similar settlements last year involving the Washington State attorney general and numerous franchisors, who were accused of using the no poaching tactic to keep wages artificially low. Arby’s, Little Caesars and Five Guys were also parties in the Washington State actions, as were Applebee’s, Auntie Anne’s, Buffalo Wild Wings, Carl’s Jr., Church’s Chicken, Cinnabon, IHOP, Jamba Juice, Jimmy John’s, McDonald’s, Panera Bread, and Sonic.

“No-poach clauses have drawn scrutiny over whether they hold down pay for restaurant employees – one of the largest segments of the United States work force – and also contribute to a broader wage stagnation that continues to plague the economy long after the end of the recession,” the New York Times reported.

Washington Attorney General Bob Ferguson launched his state’s investigation into the practice after he read a September 2017 Times article that explored how the clauses limit workers’ mobility. That year, two Princeton economists published a study in which they estimated that the clauses affect 70,000 restaurants in the U.S., more than one-quarter of fast-food outlets.

The recent uptick in legal activity has also captured the attention of the U.S. Department of Justice’s Antitrust Division, which in April 2018 announced it was actively investigating and prosecuting companies that entered no-poach agreements, and subsequently settled one such claim against the world’s two largest railroad equipment manufacturers, including Western Pennsylvania-based Westinghouse Air Brakes Technologies Corp., known as Wabtec.

Tax preparation services like H&R Block, and car repair chains like Jiffy Lube have also been linked to no-poach policies. However, in federal court filings this year, the DOJ has suggested it may advocate for less-strict enforcement of no-poach cases involving franchisors and franchisees.

January 2019 PA Jobs Update

Pennsylvania’s seasonally adjusted unemployment rate fell to 4.1% in January 2019, down 0.1% from December 2018, marking its lowest point since July 2000. Over the month, unemployment rolls decreased by nearly 4,500 individuals, with total unemployment falling to 266,025. Over Governor Wolf’s first term, the state’s unemployment rate fell by 1.3%. State unemployment statistics for the month are as follows:

• Total Unemployment – 266,025

• Change Over Month –   DOWN   4,476

• Change Over Year –   DOWN   28,855

• Change Over Gov. Wolf 1st Term –   DOWN   78,839

• Rate Change Over Month –   DOWN   0.1%

• Rate Change Over Year –   DOWN   0.5%

• Rate Change Over Gov. Wolf 1st Term –   DOWN   1.3%

As indicated above, total unemployment’s rounded percentage of the labor force, or unemployment rate, fell over the prior month (rate = unemployment / labor force). The labor force is the number of employed individuals combined with the number of unemployed individuals actively searching for work. Labor force growth can be a sign of a strengthening economy from more people working and/or more individuals searching for jobs. In January 2019, PA’s labor force grew by 9,641 individuals over the month, a combination of total employment* rising by 14,117 and unemployment down by 4,476 as noted above. As a result of the increase, the state’s labor force reached its highest point over Governor Wolf’s first term, with total growth of 58,013 (employment +136,852 / unemployment -78,839). State labor force statistics for the month are as follows: 

• Total Labor Force – 6,460,001

• Change Over Month –   UP    9,641

• Change Over Year –   UP    57,021

• Change Over Gov. Wolf 1st Term –    UP   58,013

PA non-farm* job rolls fell slightly by 500 over the month in January 2019, with total non-farm employment dropping to 6,030,200. Despite the decrease, a total of 45,500 new non-farm jobs were added year-over-year in January 2019. Over Governor Wolf’s first term, a total of 215,200 new non-farm jobs were added, 63,000 more than were added over Governor Corbett’s four-year term. The addition of 215,200 non-farm jobs ranks the commonwealth 36th out of 50 states for new percentage job growth, an improvement from it’s ranking of 49th in the same survey over Governor Corbett’s term. State non-farm employment statistics for the month are as follows:

• Total Employment – 6,030,200

• Change Over Month –   DOWN   500

• Change Over Year –   UP   45,500

• Change Over Gov. Wolf 1st Term –   UP   215,200

*Total employment for labor force provided by U.S. Census Household survey. The separate BLS Establishment survey measures non-farm jobs only.

State Job Growth Rankings Over Governor Wolf’s First Term

(Seasonally adjusted non-farm jobs. Source: U.S. Bureau of Labor Statistics.)