Should PA Increase Minimum Wage?

Do you ever think about what raising minimum wage can do to our economy?  This is an important topic in the field of Law and Economics.  Some states are thinking of going over the federal wage limit.  It looks like Pennsylvania is now getting into the action.  I will keep you posted on how this law turns out:

 

Economists who look at the coming wage hike, approved by Garden State voters in a statewide referendum on Nov. 5, are divided over whether other states, like Pennsylvania, should follow New Jersey’s lead in guaranteeing higher pay for the bottom rung of the labor force.

Either way, the debate over minimum wage won’t be going away anytime soon, as it is likely to be a part of next year’s gubernatorial races in Pennsylvania and elsewhere.

New Jersey’s minimum wage will increase to $8.25 per hour on Jan. 1, from the federal level of $7.25 per hour. The measure was approved by 60 percent of New Jersey voters on Election Day, and it ties future increases to inflation, making New Jersey the 11th state to do so.

That move erases the need for future political battles over how much the minimum wage should be.

The federal minimum wage is $7.25 per hour, which Pennsylvania uses. Pennsylvania last raised its minimum wage — from $5.15 per hour to $7.15 per hour — in 2008.

The increase in New Jersey could end up hurting the very workers it is supposed to help, says Antony Davies, a professor of economics at Duquesne University, who published a paper this month examining the potential consequences of the higher minimum wage in New Jersey.

Because raising the minimum wage creates a higher barrier for entry to the work force, it can exasperate one of the biggest problems in the economy today: the Catch-22 that exists when inexperienced workers cannot find a job without experience, which they cannot get without a job.

 

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