Discussion Paper

Minimum Wage Impacts along the New York-Pennsylvania Border

Abstract: The federal minimum wage, currently set at $7.25 per hour, has remained unchanged for the longest stretch of time since its 1938 inception under the Fair Labor Standards Act. With the real purchasing power of the federal minimum wage eroded by inflation, many states and municipalities have raised their local minimum wages. As of July 2019, fourteen states plus the District of Columbia—home to 35 percent of Americans—have minimum wages above $10 per hour, as do numerous localities scattered across other states. New York is among a handful of states—along with California, Connecticut, Illinois, Maryland, Massachusetts, and New Jersey—that has passed legislation to eventually increase minimum wages to $15 per hour. While New York began raising its minimum wage from $7.25 per hour in 2014, neighboring Pennsylvania has left its minimum wage unchanged at the federal floor. Minimum-wage variation between contiguous states has allowed researchers to evaluate the respective impacts on employment and average earnings. In this post, we gauge the effect of New York’s recent minimum-wage hikes by comparing low-wage sectors in counties along the New York-Pennsylvania border.

Keywords: New York; labor; minimum wages;

JEL Classification: J38;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2019-09-25

Number: 20190925