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A state-mandated minimum wage is a highly debated issue. Currently, Pennsylvania does not mandate a minimum wage, which means that the federal minimum wage of $7.25 per hour is the standard for the Commonwealth of Pennsylvania. The federal minimum wage was first instituted by the Fair Labor Standards Act of 1938, a Depression-era law intended to improve the economic welfare of lower-class workers [16]. The current minimum wage came into effect on July 24, 2009 [17].

Critics of the minimum wage argue that a price floor in labor markets leads to unemployment if the value of labor per hour is less than the per hour wage. Some economists believe that the macroeconomic benefits are outweighed by the costs, as more workers are likely to be laid off than given a raise. In many cases of a higher minimum wage, employers will lay off the minimum wage employees and transfer their duties to more productive, better-paid employees [15]. In the city of Seattle, a 2015 increase from $9.47 per hour to $11 per hour had little effect on overall pay raises, with a rise of 3% [14]. In some situations, an employer may leave the state or country entirely in search of lower labor costs in areas that don’t mandate a minimum wage. There are also concerns that the minimum wage is not as concentrated on the poorest households as was originally intended. The share of households with at least one minimum wage worker is nearly equal across all levels of income [7]. The fraction of the poorest fifth of households with a minimum wage worker is 22.4% [7]. This is likely due to households with high school or college students who often work part time for minimum wage, regardless of their household’s overall income.

Proponents of a minimum wage argue that the economic and social benefits to workers and lower income families outweigh the economic costs. One argument for a higher minimum wage in Pennsylvania is that without it, the state will lose laborers to neighboring states like New Jersey that have instituted a minimum wage higher than federally mandated. Between 1996 and 1997, Pennsylvania’s employment rate was negatively affected by the higher minimum wage in New Jersey [6]. There is also little consensus that a higher minimum wage would lead to overall job loss. 600 economists petitioned Congress to raise the federal minimum wage to $10.10 and noted that “increases in the minimum wage have had little or no effect on the employment of minimum wage workers” [8].

Much of the controversy surrounding a minimum wage is due to the politically polarizing nature of the issue itself. In the United States, the Democratic Party has long supported the idea of minimum wage and it was President Franklin Delano Roosevelt, a Democrat, who signed the first federal minimum wage into law. The Republican Party, who espouse the benefits of the free market, argue that price floors in labor markets make it impossible for the market to reach equilibrium and therefore full employment is impossible [5]. The current Governor of Pennsylvania, Tom Wolf, a Democrat, has supported a minimum wage increase in Pennsylvania from $7.25 per hour to $12 per hour [3].