Pa. Minimum Wage Going Up, But Phila. Impact Slight

Posted: February 01, 1989

The minimum wage will rise 35 cents an hour in Pennsylvania today, but it is likely that few people in the Philadelphia area will notice, labor analysts say.

The overwhelming majority of Philadelphia-area employers - including many low-wage businesses such as fast-food restaurants - already pay above the old minimum of $3.35 because of a labor shortage in the area, said Edward J. Murray, a labor-market analyst with the state Department of Labor and Industry in Philadelphia.

"We have plenty of jobs with wages ranging from $4.75 to $6 an hour that we can't fill," Murray said.

Based on nationwide estimates by the U.S. Department of Labor, the state figures 273,000 Pennsylvanians are due for a raise today, said Frank Lynch, a Department of Labor and Industry spokesman. But he cautioned that the numbers have not been adjusted for differences in state economies.

In pockets of low unemployment, such as Southeastern Pennsylvania, the increase will be "almost a moot point," he said.

Not everyone agrees. Bill Davidson, a spokesman for the Philadelphia Unemployment Project, said the advocacy group would rally today in front of a Center City Roy Rogers restaurant that starts employees at minimum wage.

"Right here in Center City . . . there's no labor shortage," Davidson said. Most fast-food restaurants in Center City start workers at the minimum, he said. Officials of Marriott Corp., owner of the Roy Rogers chain, could not be reached for comment yesterday.

The rally will help publicize the wage increase, Davidson said. "We feel there might be a lot of employees who aren't aware that it's happening, and we're afraid that employers won't tell them."

Lynch expressed confidence that the new minimum of $3.70, like the current level, would be largely "self-enforcing."

Nevertheless, state and federal officials are meeting today to work out arrangements for the federal wage-enforcement office to provide as much help as possible to the state, said Jack Hord, a spokesman for the U.S. Labor Department in Philadelphia.

The federal labor department has 47 wage-and-hour investigators in Pennsylvania, 18 of them in Philadelphia, Hord said.

The state labor department's Bureau of Labor Standards has 18 investigators for the entire state, and the number is not being increased to handle enforcement for the new wage minimum, Lynch said.

The higher minimum, passed by the state legislature in November, is the first increase since 1981, when Congress changed the minimum to $3.35 nationwide, Lynch said.

"We are meeting with state officials . . . to see if we can work out some kind of referral system," Hord said. "If we go into a firm and find out there's a violation of the state law, we would refer that to the state."

Because of the larger staff, federal investigators are able to do more inspections than the state agents, he said.

It is expected that federal staff will continue to investigate employers who pay less than $3.35 an hour, which is still the federal minimum, while the state will be responsible for violators who pay more than $3.35 but less than $3.70, Lynch said.

The state also is responsible for all minimum-wage violations at companies with gross annual receipts of less than $362,500, except those engaged in interstate commerce, construction and a few other businesses, he said.

The new law also alters a formula used for calculating the minimum that employers must pay to employees, such as waiters and waitresses, whose income includes tips, Lynch said.

Because of this change in the "tip credit," employers will have to pay tip-earning workers 55 percent of the new minimum wage of $3.70, or $2.04, compared with 60 percent of $3.35, or $2.01.

Beginning today, nonprofit educational institutions also will be required now to pay the minimum wage, as well as overtime, to student workers.

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