Economists for the Federal Reserve Bank of New York in 2019 used the Pennsylvania Legislature’s refusal to raise the minimum wage as the basis of a “natural experiment.”
New York had increased its minimum wage far beyond Pennsylvania’s $7.25 an hour to $13.75 an hour. The researchers examined the effect on wages and employment in 19 adjacent Pennsylvania and New York counties. They focused on the leisure and hospitality, and retail sectors.
Some legislators argue that a higher base wage harms workers because employers respond by reducing hours, the number of jobs, or both.
The New York Fed, however, found that employment increased in New York faster than it did in Pennsylvania after New Yorkraised the wage.
Now the Keystone Research Center, a left-leaning think tank in Harrisburg, has followed up the Fed research. It compared the same border counties, including Susquehanna, Wayne and Pike. Pennsylvania’s minimum remains $7.25; New York’s is $15.
Employment in both states rose at roughly the same rate from 2010 until 2017, when it soared in New York. From 2013 through the third quarter of 2022, wages “rose nearly 50% for New York workers …, far above Pennsylvania’s 10% … New York … workers earned an average of $111 a week more than their Pennsylvania counterparts … a $5,772 yearly difference for someone employed 52 weeks.”
Researchers said many people in Pennsylvania border counties work in New York to take advantage of the difference, contributing to local labor shortages in Pennsylvania.
The study also examined border counties in Pennsylvania and New Jersey, where the minimum wage is $14.13. New Jerseywages were 50% higher compared with 25% higher in Pennsylvania, and the weekly wage was comparable. Researchers noted that the data is somewhat skewed by the inclusion of relatively high-wage Philadelphia.
Failing to raise the minimum wage shortchanges workers, diminishes tax revenue and increases state social safety-net costs — a taxpayer-funded corporate subsidy.
The minimum wage last was raised in 2009. The current period is the longest one without a raise since the minimum wage was created in 1938. Lawmakers should start catching up with neighboring states.
— Republican & Herald, Pottsville via TNS
