Minimum wage set to jump by two dollars

Many Pennsylvanians are getting a raise for the first time in nearly a decade, but Penn students hoping to see their paychecks swell may be disappointed.

Governor Ed Rendell signed legislation on July 9 that will increase Pennsylvania's minimum wage from the federal standard of $5.15 per hour first to $6.25 per hour on Jan. 1, 2007 and then to $7.15 per hour on July 1, 2007.

According to the governor's spokeswoman, Kate Philips, increasing the minimum wage was a goal that Rendell, a Penn alumnus, pushed for because the cost of living had risen substantially since the federal government last raised the rate.

"The governor fought hard for" the increase, Philips said. "He's thrilled about it."

However, the Penn students who can expect a windfall from the wage increase are a small "subset" of the student body, Career Services Director Patricia Rose said.

"Frankly, most of our students make above minimum wage," Rose said. "I think [the increase] is going to have very little effect on students."

She added that any students who benefited would likely be those who work part time or over the summer because the lowest reported salary for a Class of 2005 College graduate was $18,000, well over the expected annual salary of a worker earning minimum wage.

When the state minimum wage reaches $7.15 per hour, it will be equal to the rates in New York, New Jersey, and Alaska. Only five states and the city of San Francisco will have higher minimum wages, according to the U.S. Department of Labor.

Philips said that the governor would have preferred to see an even greater increase for the over 400,000 state residents who earn the minimum wage as well as a measure that would increase the rate as living costs rose, but that "there was no appetite in the legislature" for further increases.

According to Wharton professor Bernard Anderson, the effect of the increase on workers who rely on minimum wage jobs to support themselves and their families will be "limited."

"The minimum wage contributes very little to the reduction of poverty," Anderson said.

Anderson said that while critics of the minimum wage have suggested that it increases unemployment, these effects are negligible. Rather, he said that increasing the minimum wage by levels suggested by politicians will still leave families living below the poverty level.

Sharon Jacobs, the director of compensation for the University, did not say how many Penn employees earn the minimum wage, she said in an e-mail statement that Penn "is committed to paying market-competitive wages" and that Penn is currently compliant with the minimum wage and will remain so in the future.

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