The impact of minimum wage increases in rural and urban Pennsylvania

This research, conducted in 2016, estimated the effects of increasing the minimum wage in rural and urban Pennsylvania from $7.25 to either $9.00 or $10.10 per hour, assuming that such a change will be implemented in 2017. In terms of socio-demographic characteristics, there were many similarities between rural and urban minimum wage earners in Pennsylvania. They were mostly female, white, younger, never married, with a high school diploma or less, English speaking, driving to work, and commuting less than 15 minutes to work. There were only shades of differences between rural and urban Pennsylvania minimum wage earners. For example, rural workers were significantly more white, more were teenagers, there was a higher percentage with a high school diploma or less, were more English speaking, more had disabilities, and they spent less time commuting to work.There seemed to be no significant industrial or occupational differences between rural and urban minimum wage workers in Pennsylvania. The last four stages of the study involved empirical estimations of the impact of a minimum wage increase on employment, income, poverty level and public income-maintenance programs. The wage distribution derived for 2014 was projected to 2017 because of the prevailing assumption that the increase in the minimum wage in Pennsylvania will be implemented in 2017. The net gains resulting from an increase in the minimum wage from $7.25 to $9.00 in 2017 are estimated to exceed $700 million for wage and salary workers in Pennsylvania. The $10.10 option may produce net income gains of over $2 billion. These gains will probably be lower than predicted because business profits may decrease due to higher labor costs pushing prices of goods and services higher, and sales lower. It is estimated that 2,634 rural and 7,269 urban Pennsylvania households may be lifted out of poverty if the minimum wage is raised to $9.00 in 2017. The $10.10 option may lift as many as 7,547 rural households and 21,347 urban households out of poverty. Finally it is estimated that the federal government expenditures on healthcare, cash assistance and tax credit programs may decrease by $90 million under the $9.00 option and by $262 million under the $10.10 option.