Small Business Wage Boost
Idea Category: Jobs and Entrepreneurship, Promoting Equity | Funding Source: American Rescue Plan
2023 Ideas Challenge Entry
Scranton Mayor Paige Cognetti's Small Business Wage Boost program is an employee retention program designed to address the gap between the current working wage and a livable wage, funded by the American Rescue Plan Act (ARPA). Small businesses throughout the City of Scranton can apply for up to $50,000, disbursed over two years, to raise their employees' wages closer to the state average.
In the program’s first year, Scranton used ARPA funding to fully fund the gap between the current wage and elevated wage. In year two, the City and business will share the responsibility of funding the higher wage. By the third year, the goal is for businesses to fully support their employees' new wages. The Wage Boost program is an innovative approach to address a minimum wage in Pennsylvania that lags behind the needs of 21st century workers. By helping small businesses raise employees' wages, it's a win-win-win for the city: businesses can retain employees who might leave for other better paying jobs, employees can keep up with the cost of living, and the city retains tax-paying businesses.
Impact:
The program was announced to the community in October 2022. Across two rounds of funding announcements, nine businesses have received between $25,000 and $50,000 in wage boost grants to be used over the course of the next two years. A third round of applications opens late summer 2023. The program’s impact is seen in the potential economic mobility of the employees receiving higher wages, a reduction in turnover for employers, and the ongoing success of the businesses that have tapped into the program.
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