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Pay raise comes today for Pa.'s minimum-wage workers

The rate will be $6.25, up from $5.15, the first boost in a decade. In July, it goes to $7.15. Small businesses have longer to comply.

Pennsylvania today joins six other states in raising the minimum wage above the federal standard of $5.15 an hour that has been in effect since 1996.

Employers with more than 10 workers will have to pay at least $6.25 an hour until July 1, when the minimum wage will rise again to $7.15 an hour, under legislation approved by the Pennsylvania General Assembly and signed by Gov. Rendell last summer. Employers with fewer than 11 workers have until Jan. 1, 2008, to comply.

While Pennsylvania's initial increase amounts to less than $10 a day in pre-tax pay for a full-time worker, people like Kevin Spicer, 56, a South Philadelphia resident, say it will be a big help.

A former tax preparer who decided to switch professions, Spicer makes $5.15 an hour in a training program for job counselors, a level that means he often buys SEPTA tokens two at a time because he can't afford to pay $13 for a 10-pack.

"It's necessary to do without certain things to pay the bills," said Spicer, a single father of a 17-year-old daughter. "Most people want to go out for dinner, or to a movie, or see a show or a sporting event. Those things are pretty much out for me unless somebody gives me a free ticket.

"I'm not trying to keep up with the Joneses," he added. "I'm just trying to reach a certain comfort level."

Pennsylvania is catching up with its nearby neighbors. New Jersey raised its minimum wage to $6.15 an hour in 2005 and bumped it up again, to $7.15, in October. Delaware's wage floor goes up today, from $6.15 an hour to $6.65, and to $7.15 an hour in a year.

A total of 29 states and the District of Columbia now require that workers make more than the federal minimum of $5.15. Besides Delaware and Pennsylvania, the other states raising the minimum wage today are Arizona, California, Massachusetts, New York and North Carolina.

Proponents of raising the minimum wage say that about 850,000 Pennsylvania workers will benefit from the increase. They cite surveys indicating that raising the minimum wage has wide public support, including from almost half of the owners of small businesses that typically are viewed as suffering the most when the wage floor goes up.

"It sets a halfway decent floor for the first time in years," said John Dodds, director of the Philadelphia Unemployment Project. "People in low-wage jobs do some of the dirtiest, most difficult work that others do not want to do."

In a nationwide Wells Fargo-Gallup Small Business Index survey of 603 small-business owners conducted last May, 14 percent said they hired workers at the minimum wage, but two-thirds of that group said they didn't expect to keep new employees at that level more than a year. Eighty-six percent of the owners said the minimum wage had no effect on their business, and 46 percent said the minimum should be increased over $5.15 an hour.

The Pennsylvania increase was vigorously opposed by business groups, including those representing restaurant owners and operators of small businesses.

Nationally, the U.S. Chamber of Commerce continues to lobby against raising the federal standard from $5.15. Congress is expected to vote on legislation to increase the level this winter or spring.

The Greater Philadelphia Chamber of Commerce has taken no stand on the issue, a spokesman said last week.

But some business owners in the Philadelphia area that typically hire low-wage employees say their profits won't be affected much by the increase, nor will they have to increase prices to cover the higher payroll costs.

"It really doesn't impact us much at all because most employees make above the minimum," said Patrick J. Burns, owner of the Fresh Grocer supermarket chain. "To get good help, you have to pay above the minimum wage."

John Marsella Jr., whose Summerwood Corp. operates 67 Taco Bells and other franchise restaurants in the Philadelphia region, said his eateries already pay above the minimum to stay competitive with other fast-food chains.

Still, Montgomery County restaurateur Jim Flanigan, president of the Pennsylvania Restaurant Association, said he believed some fast-food chains would have to raise prices to cope with the 21 percent increase in the minium wage, or take the higher labor costs out of their profits.

"I think they're going to be faced with it much more so at the fast-food chains," he said, compared with restaurants like his Flanigan's Boathouse in Conshohocken and Malvern, which already pay employees above the minimum.

The restaurant association succeeded in persuading the legislature to keep a key exception in the wage law that applies to employees who receive tips, Flanigan said. Those workers can make as little as $2.83 an hour, provided tips increase their compensation above the minimum-wage level.

Turning the Page on Minimum Wage

Pennsylvania's minimum wage rose to $6.25 per hour today from $5.15 per hour. On July 1, it will increase to $7.15 per hour.

There are exceptions to that, however. Generally, small businesses with the equivalent of fewer than 11 full-time employees have more time to phase in the higher wage. For them, a new minimum of $5.65 per hour was effective today. It will rise to $6.65 on July 1 and $7.15 on July 1, 2008.

In addition, a training wage of $5.15 per hour can be paid to employees under 20 years old for 60 calendar days. That amount would change if the federal minimum wage is raised.

New Jersey raised its minimum wage to $7.15 as of Oct. 1 from $6.15. In Delaware, the minimum rose today to $6.65 from $6.15 per hour. On Jan. 1, 2008, Delaware's minimum wage will rise to $7.15.EndText

Workers and employers can find out more about the new minimum wage at the Pa. Department of Labor and Industry's Web site via http://go.philly.com/wageEndText

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