Pay Rates Rising Faster in States with Minimum Wage Hikes

The minimum wage is scheduled to increase in two dozen states and 48 cities and counties across the nation this year, continuing a trend that saw more than 20 states and many localities raise their minimums in 2019, even as federal minimum wage legislation has stalled in the U.S. Senate.

In Pennsylvania, the minimum wage remains at the federal minimum of $7.25 per hour as the state House of Representatives has not acted upon legislation introduced by Senator Tartaglione that would raise the rate by $2.25 over the next two years. The Senate adopted SB 79 with broad bipartisan support in November.

As one might expect, average wages for the nation’s lowest-paid workers are improving at their fastest rate since the Great Recession. Yet, the White House is trying to make a case that the president’s 2017 corporate tax cuts are driving higher pay scales.

In a column published by the Wall Street Journal on January 2, two former Trump economic advisors claim that companies reinvested their higher after-tax profits into their businesses, improving employee productivity and leading to higher employee earnings. In response to this theory, Slate noted that business investment has plummeted since an initial spike in early 2018 and, “for the past two quarters has actually been a drag on the economy.”

There’s a more-likely cause for wage increases among lowest-earning workers, according to Slate: “Most economists would attribute that to minimum wage hikes and the gradually strengthening labor market, which has been on basically the same slow upward trajectory since the Obama years.”

The Washington Post supported this theory with numbers. Nearly 7 million U.S. workers began 2020 with higher wages due to minimum wage increases, many of which have been implemented in phases over recent years, the newspaper reported.
“Over the past year, paychecks for those in the bottom 25% of the workforce grew almost 1.5 times as fast (in states that raised the minimum wage) as those in states where the minimum wage did not budge,” the Post wrote.

“By contrast … the other 75% of the workforce didn’t see pay hikes to the same degree, even in states where minimum wage increased. That reinforces the idea that rising minimum wages are the main reason that low-wage workers are doing better, as opposed to other forces.”

PA Court to Decide if Amazon Must Pay Workers for Security Screening Time

It’s been more than five years since the U.S. Supreme Court shot down a class-action claim by Amazon warehouse workers that they were being unfairly deprived of wages for the time they were forced to spend in post-shift security screenings. But the company’s Pennsylvania-based workers may be in line for some long-awaited relief from the state’s highest court.

The Pennsylvania Supreme Court has agreed to hear a claim that Amazon’s no-pay policy violates state law. According to the Inquirer, the U.S. Court of Appeals for the Sixth Circuit – based in Ohio – asked the state court to decide the case because the federal court is “not familiar enough with Pennsylvania law.”

In 2014, the U.S. Supreme Court ruled unanimously that the policy does not violate the Fair Labor Standards Act of 1938. Specifically, the high court found that the Portal-to-Portal Act of 1947 (legislation adopted by a Republican-led Congress to restrict the FLSA) absolves companies from paying workers for “preliminary” or “postliminary” activities, including the security screenings, the New York Times reported. Justice Clarence Thomas wrote on behalf of the court that the post-shift screenings were not “integral and indispensable” to the workers’ jobs, the Times reported.

Yet, the federal ruling did not settle state-law claims involving workers in Pennsylvania and other states including Arizona and Nevada, according to analysis published by EmploymentLawDaily.com.

The two Pennsylvania employees named in the suit both worked at an Amazon warehouse in Breinigsville in the Lehigh Valley. “The two have been outspoken about working conditions in the early 2010s, a time of less public scrutiny on Amazon’s warehouses,” the Inquirer wrote. “… The plaintiffs said the security checks, aimed at preventing thefts, could take up to 20 minutes after they clocked out.”

Amazon has denied that the checks took that long, the newspaper reported.

Employee Health Insurance Costs Rising Faster than Median Wages

Worker contributions to their employer-sponsored health insurance plans rose faster that median incomes in every U.S. state from 2008 to 2018 according to a new study published by the Commonwealth Fund.

The report released on November 21 found that middle-income workers spent 6.8% of their income on premiums in 2018, in addition to 4.7% on per-person deductibles across single and family plans. When combined, average premiums and deductibles exceeded 10% of median income in 42 states that year.

Meanwhile, from 2016 through 2018, average premiums rose 4.2% and deductibles rose 4.8%, while median income rose 3.4%.

“In addition, as costs have climbed, families haven’t received higher-quality insurance,” the researchers concluded. “In 18 states, the average health plan deductible is now 5% or more of income, meeting the threshold for underinsurance. While this study only considered families with middle incomes, lower-income families with employer coverage devote an even larger share of their income to health insurance and related costs.”

The Inquirer described the study as “a sobering picture of how employer-sponsored health insurance – which covers the majority of Americans under age 65 – is becoming increasingly unaffordable for middle-income families.”

Premiums and deductibles accounted for about 10% of workers’ income in Pennsylvania and New Jersey in 2018, the newspaper wrote, compared to 6.3% in Pennsylvania and 5.8% in New Jersey a decade earlier. In some states, insurance costs accounted for up to 16% of wages.

PA’s Unemployment Continues to Rise as National Rate Improves

New county by county employment data compiled by the Pennsylvania Department of Labor & Industry show that unemployment rates increased month-over-month in 39 of the Commonwealth’s 67 counties in November, while the rates increased in 61 counties year-over-year.

The county by county data followed a statewide report that showed Pennsylvania’s overall unemployment rate rose one-tenth of a percentage point to 4.3% for November. The rate increased for the third consecutive month and the fourth time in five months. The statewide rate was one-tenth higher than it was in November 2018.

Meanwhile, the national rate was 3.5% for November, representing an improvement of two-tenths of a percentage point year-over-year and one-tenth month-over-month.

Four rural Pennsylvania counties showed the greatest improvement month-over-month led by Cameron (8.7 to 6.5%) and Forest (7.0 to 6.3). But five counties showed increases of at least three-tenths of a point, led by Armstrong (5.6 to 6.0).

November’s metropolitan area rates were 5.0% for Philadelphia, 4.3 for Pittsburgh, 5.2 for Scranton/Wilkes-Barre, 4.1 for Allentown/Bethlehem/Easton, 3.6 for Harrisburg/Carlisle, and 4.5 for Erie.

November 2019 PA County Unemployment Rates

Ranked Lowest to Highest
(Source: PA Department of Labor & Industry)