The following analysis is provided to Pennsylvania reporters as part of the Keystone Research Center’s ongoing tracking of the health of the Pennsylvania economy. The Keystone Research Center is a nonprofit, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania economy.

HARRISBURG, PA (July 24, 2009) - Today, the minimum wage in Pennsylvania will rise from $7.15 to $7.25 an hour, as current federal law increases the wage for the third and final time.

"More than 100,000 Pennsylvania workers will likely benefit from this small but important boost in the minimum wage," said Mark Price, Ph.D., Labor Economist for the Keystone Research Center. "68,000 minimum-wage workers will benefit directly from the 10-cent increase, which for a full-time worker will add $208 to their paychecks over the next year. This is a small but important benefit for workers who are struggling through one of the worst recessions in decades."

Another 40,000 workers whose wages fall between $7.25 and $7.35 per hour - within 10 cents of the new minimum wage - would likely benefit indirectly from today's increase in the minimum wage, Dr. Price noted. While the new minimum wage will not mandate raises for these workers, they are likely to receive them as their employers seek to retain higher-quality workers than are currently available at the new minimum wage.
"An extra few hundred dollars over the next year is an important contribution to the family budgets of thousands of low-wage workers across the Commonwealth," Dr. Price said. "It also will help the state move closer toward an economic recovery."

Research shows that increases in the minimum wage lead households with a minimum-wage worker to increase their spending, Dr. Price explained. The Economic Policy Institute in Washington, D.C. estimates that the increase in the federal minimum wage will boost spending in the U.S. economy by $5.5 billion over the next year, providing an important boost to the ailing economy.