{"id":158615,"date":"2025-05-05T14:56:00","date_gmt":"2025-05-05T18:56:00","guid":{"rendered":"https:\/\/marcstier.com\/blog2\/?p=158615"},"modified":"2026-09-19T18:58:01","modified_gmt":"2026-09-19T22:58:01","slug":"seven-myths-about-raising-the-minimum-wage-debunked-2025-update","status":"publish","type":"post","link":"https:\/\/marcstier.com\/blog2\/?p=158615","title":{"rendered":"Seven Myths About Raising the Minimum Wage\u2014Debunked (2025 update)"},"content":{"rendered":"

Originally published at Pennsylvania Policy Center<\/a> on May 5, 2025.<\/em><\/p>\n

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May 5, 2025<\/p>\n

By Marc Stier<\/em><\/p>\n

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Note: This is an updated version of a piece I wrote while I was director of the Pennsylvania Budget and Policy Center. It was published in the Penn Capital\u2013Star on October 3, 2019<\/a>. A few things have changed since then\u2014and I\u2019ve added sixth and seventh myths to supplement the original five\u2014but most of the arguments I made at that time not only remain true but are supported by new evidence.<\/em><\/p>\n

Raising the minimum wage in Pennsylvania is long overdue. Yet even though the Pennsylvania House of Representatives passed a good minimum wage bill in 2023 that was actually modeled on one introduced in the Senate, Pennsylvania\u2019s Senate Republican leadership continues to refuse to hold a hearing or bring it up for a vote where, we believe, it would almost certainly pass.<\/p>\n

Some legislators remain apprehensive about raising the minimum wage because they believe some of the myths about its economic consequences are doing so. Others are using these myths as an excuse for opposing the minimum wage. They need an excuse because the Chamber of Commerce and other pro-business groups that give them campaign contributions oppose the minimum wage.<\/p>\n

Why do these business groups oppose raising the minimum wage? It\u2019s because they understand what this issue is about. It\u2019s not just about more money going into the pockets of working people, although that is critical. The minimum wage is part of the effort to change the rules of our economy so that working people do better. In addition to raising the minimum wage his also means strengthening the right to organize unions and fixing a tax system that takes a higher percentage of the income of the poor than the rich. Raising the minimum wage is one step toward reversing the trends of the last 40 years in which a greater share of our income and wealth has gone to the very rich. A minimum wage increase would help benefit all working people and help expand the middle class.<\/p>\n

We aren\u2019t going to convince those who believe the rules of our economy should be tilted in favor of the ultra-rich and wealthy corporations that the minimum wage is no threat to them. It is such a threat. But we can show that it\u2019s not a threat to anyone else by refuting the myths about the so-called \u201cdangers of raising the minimum wage.\u201d<\/p>\n

MYTH ONE: \u201cThe minimum wage was never meant to be a living wage. It\u2019s primarily for young people starting out.\u201d FALSE.<\/strong><\/p>\n

The minimum wage was established to ensure that jobs pay enough to support families. At its inception in 1938 it was set at about 50% of the wage paid<\/a> to a typical (median) worker. But both the national minimum wage and Pennsylvania\u2019s have fallen so low that they pay only 25% of a typical worker\u2019s hourly earnings.<\/p>\n

Today, more than 12% of the Pennsylvania workforce makes less than $15 per hour\u2014that\u2019s about 776,000 workers. That\u2019s too many jobs to all be training jobs held by teenagers. In Pennsylvania, 1.34 million workers\u201421% of all workers\u2014would have higher wages because of a $15-per-hour minimum wage. This includes the 776,000 who currently make less than $15 per hour and the 568,000 who currently make $15 or slightly more now and would see their wages rise because businesses don\u2019t want to lose experienced workers About 84% of them are adults, 69% are white, more than 60% are women, 25.6% have some college education, 28% have children living with them, and a majority work full time.[1]<\/a><\/p>\n

All these workers are critical to Pennsylvania businesses which in turn provide the goods and services we need. We owe essential workers a decent life and to get it we must adjust the minimum wage back to about half of a typical worker\u2019s wage\u2014around $15.<\/p>\n

MYTH TWO: \u201cRaising the minimum wage just increases the price of goods across the board.\u201d FALSE.<\/strong><\/p>\n

An increase in the minimum wage may lead to a small increase in prices, but it would be far less than the increase in wages for three reasons: (1) Labor is only part of the cost of producing goods and services. (2) A higher wage reduces turnover and training costs for businesses, which saves them money. (3) A higher wage improves worker morale and productivity, which also saves them money.<\/p>\n

A recent study in California<\/a> found that a 25% minimum wage increase raised restaurant prices by only 1.45% in a state where tipped workers (waitresses, servers, etc.) get the same minimum wage as other workers.<\/p>\n

State legislators who oppose the minimum wage are fond of talking about their friends who own pizza shops who say that they would have to drastically raise prices if the minimum wage were $15, which would force them to go out of business. Many even claim that the benefits of an increase in the minimum wage would be wiped out by the higher cost of pizza.<\/p>\n

These pizza shop owners forget two things. First, even if they have to raise their prices a bit, other pizza shop owners\u2014as well as the owners of other competing businesses\u2014would have to as well, so they wouldn\u2019t be at a competitive disadvantage. And second, they forget that wages are only part of the cost of doing business. There is also the cost of pizza boxes, ovens and the electricity to run them, and the raw materials of pizza. So, the increase in prices would be far less than the increase in wages.<\/p>\n

We have tested this hypothesis. Every state around us has a higher minimum wage than Pennsylvania. Yet as we can see from the table below, though the average minimum wage in those states is 84% higher than Pennsylvania\u2019s minimum wage, the price of a standard Domino\u2019s pizza in those states\u2019 capital cities averages only 8% higher than the price in Harrisburg. As of January 1 of this year, New York and New Jersey already have a $15.00 minimum wage, and Washington, DC\u2019s minimum wage is $17.00. Yet the same Domino\u2019s pizza is no more expensive in New Jersey and is only a dollar (or 9%) more in Washington, DC. It is $2 or 18% more in Albany, New York, than in Harrisburg. But New York\u2019s minimum wage is 107% higher than Pennsylvania\u2019s. Low-income New Yorkers are clearly ahead of those in Pennsylvania.<\/p>\n

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Click to access pizza-2024chart.pdf<\/a><\/p>\n<\/div>\n<\/figure>\n

This evidence also shows that other factors besides the minimum wage affect pizza prices. A Domino\u2019s pizza cost the same in Trenton, New Jersey, as it does in Harrisburg despite New Jersey\u2019s much higher minimum wage. And it\u2019s 18% less than the cost of pizza in Albany, New York, despite the two states having the same minimum wage.<\/p>\n

\"\"<\/figure>\n

There is also no evidence that the minimum wage has led to a pizza shortage in New York, New Jersey or Washington, DC. No one is crossing the border from New York or New Jersey to Pennsylvania in search of pizza at a lower price. And you can still buy a slice of pizza in New York Cit for $1.<\/strong><\/p>\n

But many Pennsylvanians are crossing the border to New York and New Jersey in search of higher wages. And, no doubt, some of them are buying groceries or pizza before they return to our state.<\/p>\n

Finally, while the minimum wage would increase wages for 21% of Pennsylvania workers the small increase in prices would be concentrated in industries that mostly employ low-wage workers. Other sectors may also increase prices slightly as the prices they pay for goods produced by minimum wage workers would increase a bit.  But since the increase in prices in industries that pay the minimum wage will be small, and the goods they produce are likely to be a small part of the costs of others businesses, the overall prices level would barely budge.<\/p>\n

MYTH THREE: \u201cRaising the minimum wage will hurt people earning $12, $15, $18 per hour right now.\u201d FALSE <\/strong><\/p>\n

As I pointed out above, if the minimum wage goes up, those making just above the new minimum wage would see their salaries go up as well. So, those workers would also benefit from an increase in the minimum wage. And, ultimately, most other workers would too. In fact, an increase in the minimum wage would add a total of $5 billion to the wages of all <\/em>Pennsylvanians<\/a> in the short term. And because all of those additional wages would result in new consumption, in the long term there would be a strong increase in business activity in the state. So, business activity would expand, unemployment would go down, and the wages of other workers would increase as well. Everyone would benefit, despite the slight increase in prices in limited sectors of the economy.<\/p>\n

MYTH FOUR: \u201cRaising the minimum wage will destroy small businesses.\u201d FALSE.<\/strong><\/p>\n

Minimum wage workers work for big and small businesses, so a higher minimum wage in no way disadvantages small businesses\u2014it establishes a level playing field.<\/p>\n

A higher minimum wage can also benefit small businesses by reducing turnover and training costs and increasing worker productivity.<\/p>\n

In addition, at a time when many small businesses can\u2019t hire enough employees, raising the minimum wage would actually help not hurt them. When one business raises its wages to hire more workers, it might fear being put at a competitive disadvantage. However, if all businesses in a sector raise their wages, no one business would suffer, and they would all have a better chance of hiring more employees.<\/p>\n

And finally, as the chair of the executive committee of the U.S. Chamber recently pointed out<\/a>, when workers are paid more, they can spend more, which helps local small businesses.<\/p>\n

And keep in mind that that small businesses, as well as workers, are harmed by the ability of the few wealthy corporations that dominate so many markets to hold down not just wages but what they pay small businesses. (Large corporations in concentrated industries are, to use the technical term, monopsonists Raising the minimum wage would thus help small businesses to counter the impact of the power larges businesses have over their prices. (And since that increase in prices comes out to the economic rents large corporations secure by means of their monopsony power, they will not be able to pass on the price increase to their own customers.) Again, this effect is small<\/p>\n

MYTH FIVE: \u201cRaising the minimum wage will lead to job loss.\u201d FALSE.<\/strong><\/p>\n

There is no question that at some level, at, say, $30 or $40 per hour, raising the minimum wage would cost jobs. But no one is proposing such an increase. A great deal of recent research is consistent with earlier research showing that raising the minimum wage doesn\u2019t reduce jobs\u2014in fact, it often creates new ones by increasing consumption in local communities that in turn creates jobs.<\/p>\n

A  <\/u>new study<\/a> (see also here<\/a>) by UC Berkeley economists of more than 750 counties found that increasing the minimum wage to $15 per hour by 2024 would likely boost incomes but would not lead to significant job losses. The radical economists (sic) at the N.Y. Federal Reserve found that when New York raised its minimum wage, but Pennsylvania did not, both wages and employment increased faster on the New York side of the state border than on the Pennsylvania side. The Keystone Research Center<\/a> replicated that research for more recent years and found the same results.<\/p>\n

Other studies<\/a> <\/a>and research<\/a> analyzing data going back to 1979 have found a higher minimum wage has little or no impact on jobs. And, while some older studies and reports, such as those the Independent Fiscal Office relies on, reach different conclusions, a review by the Keystone Research Center<\/a> points out that scholars\u2019 consensus firmly supports the now large body of research that refutes these claims.<\/p>\n

Given that a higher minimum wage doesn\u2019t hurt businesses or lead to significantly higher prices, it\u2019s no surprise that research shows a wage increase has little or no effect on employment.<\/p>\n

Finally, we want to point out that the current low-unemployment economy, in which businesses are struggling to hire workers, is the best possible time to raise the minimum wage. Anyone who does lose a job would likely get another one quickly\u2014and at higher pay.<\/p>\n

MYTH SIX: <\/strong>Raising the minimum wage would push low-income workers off a benefit cliff leaving them even worse off. FALSE.<\/strong><\/p>\n

It\u2019s a bit rich when the folks who have long fought against any program that helps working people or those with low incomes oppose raising the minimum wage on the grounds that it will make them worse off because their incomes would be too high to qualify for social safety net programs like SNAP (\u201cfood stamps\u201d), Medicaid or Child Care Works. They never respond to that concern with the obvious answer: raise income limits.<\/p>\n

Research by the Pennsylvania Budget and Policy Center in 2019<\/a> shows that very few families with low incomes would be worse off because an increase in the minimum wage would reduce their safety net benefits, and our recent update <\/a>demonstrates that the obvious solution has been adopted. Recent changes to eligibility requirements for SNAP and Child Care Works have eliminated the benefit cliff problem. And of course, the expansion of those programs was enacted by supported of the minimum wage not opponents of it.<\/p>\n

Here, as with the other five myths, the arguments of opponents of the minimum wage have become more implausible the more we learn about how the minimum wage works.<\/p>\n

MYTH SEVEN: No one cares about the <\/strong>minimum wage any more. FALSE.<\/strong><\/p>\n

A May 2022 poll<\/a> commissioned by the State Innovation Exchange found that 73% of Pennsylvanians support putting the state on a path to a $15-per-hour minimum wage. A majority of Pennsylvanians in every state House and Senate district<\/a>, including the most Republican districts, agree.<\/p>\n

CONCLUSION<\/strong><\/p>\n

Myths abound about the minimum wage because, like all myths, they serve the interests of the myth-makers. Unfortunately the influence of the vast majority of Pennsylvania workers are directly contrary to those of the myth makers.  For the sake of the vast majority of working people in Pennsylvania, it’s time for the Pennsylvania Senate to follow the House and put Pennsylvania on a both to a $15 minimum wage.<\/p>\n

[1]<\/a> These data are from Claire Kovach, Who Benefits? The Demographic Impact of a Higher Minimum Wage in Pennsylvania<\/em>, Keystone Research Center, February 1, 2024, https:\/\/keystoneresearch.org\/wp-content\/uploads\/WhoBenefits_15by2026.pdf<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Originally published at Pennsylvania Policy Center on May 5, 2025. May 5, 2025 By Marc Stier Note: This is an updated version of a piece I wrote while I was director of the Pennsylvania Budget and Policy Center. It was published in the Penn Capital\u2013Star on October 3, 2019. A few things have changed since then\u2014and I\u2019ve added sixth and seventh myths to supplement the original five\u2014but most of the arguments I made at that time not only remain true but are supported by new evidence. Raising the minimum wage in Pennsylvania is long overdue. Yet even though the Pennsylvania House of Representatives passed a good minimum wage bill in 2023 that was actually modeled on one introduced in the Senate, Pennsylvania\u2019s Senate Republican leadership continues to refuse to hold a hearing or bring it up for a vote where, we believe, it would almost certainly pass. Some legislators remain\u2026 Continue reading<\/a><\/p>\n","protected":false},"author":1896,"featured_media":158614,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[291,316,288,201],"tags":[],"class_list":["post-158615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-post","category-published-op-ed","category-penn-policy-center","category-published-op-eds-2"],"jetpack_publicize_connections":[],"jetpack_shortlink":"https:\/\/wp.me\/p35YuU-Fgj","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/marcstier.com\/blog2\/wp-content\/uploads\/2026\/09\/PizzaManMinimumWage.jpg?fit=1200%2C628&ssl=1","_links":{"self":[{"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/posts\/158615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/users\/1896"}],"replies":[{"embeddable":true,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=158615"}],"version-history":[{"count":1,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/posts\/158615\/revisions"}],"predecessor-version":[{"id":158725,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/posts\/158615\/revisions\/158725"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=\/wp\/v2\/media\/158614"}],"wp:attachment":[{"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=158615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=158615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marcstier.com\/blog2\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=158615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}