Difference in Location

Sen. Haywood’s Senate Bill 1045 would allow local governments to set the local minimum wage to a level that is appropriate to the cost of living in the area. While the statewide minimum wage should be raised immediately to $12 and $9 dollars for tipped workers, the senator’s legislation would ensure that the cities and municipalities would have the option to raise their wages on their own, without having to rely on state legislation to do so. Local officials should be able to increase wages without having to wait for statewide legislation that locks all areas into the same wage that may not be right for their local workers. A similar policy has been implemented, and been working, in New York state and New York City.

Pennsylvania’s local governments need the right to set the minimum wage to a level that best fits the living costs of that area without having to wait on action at the state level.

Housing

The average rent value for an apartment in the least expensive areas of Philadelphia is $764 per month. With the average cost of utilities at $181 for a family of two, a renter is looking at a monthly cost of $945 on housing expenses.

Receiving a bi-weekly paycheck, a minimum wage worker is bringing home a monthly pay of $1,160. Once housing expenses are subtracted, that person is left with only $215 to pay for other expenses in the month. With housing alone taking up most of a minimum wage workers income, costs of food, childcare, transportation, health care, and any other emergency expenses that may occur are unmanageable and a reliance on assistance is necessary.

Childcare

In 2016, the Economic Policy Institute found that it costs a family an average of $10,644 per year, $887 per month for infant childcare services. The childcare cost for a 4-year-old averaged to $8,076 per year, $673 per month. Some Pennsylvanians are fortunate to have family members and friends who assist working parents with childcare free of charge, but there is concern for the lack of help for those who can’t rely on friends and family receive.

For Pennsylvanians who work at the minimum wage level and rely on childcare services outside their social circle, they are looking at paying 70% of their yearly income for those necessary services. The plan to immediately raise the wage to $12 per hour would drop that percentage to 43% of income.

While that cost is still very high, the annual increase to match living costs would begin to help make childcare more affordable for low earning families.

Transportation

Traveling to and from work can be a costly expense all on its own and working a job that can barely cover the cost to get there is almost pointless. A weekly SEPTA pass in Philadelphia is $24.00, a monthly pass is $91. $91 per month for a minimum wage worker is a hefty cost in addition to all other costs of living. Other options where an individual would pay per trip through a ride sharing app, such as Uber or a taxi service, would lead to daily costs that most families could not afford to sustain long term.

Not all minimum wage workers live in an area where public transportation is a feasible way to travel daily. The cost of owning a car is a huge expense, but many families rely on their own transportation to get to where they need to be, whether it’s to work, childcare centers, school, or doctor’s appointments. Beside the cost of buying the car through a monthly car payment loan, additional costs of gas, repairs, and inspections can add up quickly, making owning a car a huge financial burden. The average cost of car insurance is $815 per year, that’s about 18% of a minimum wage workers yearly salary.

What We Can Do

It is time for lawmakers to come together and support a raise in Pennsylvania’s minimum wage. For more information on how to get involved in the fight to raise the wage, visit Sen. Haywood’s Citizen Advocacy Hub or contact his district office.