THE IMPACT OF MINIMUM WAGE INCREASES IN RURAL AND … · The net gains resulting from an increase...

THE IMPACT OF MINIMUM WAGE INCREASES IN

RURAL AND URBAN PENNSYLVANIA

By:

Todd Behr, M.A., ABD, Constantinos Christofides, Ph.D., and Pattabiraman Neelakantan, Ph.D.,

East Stroudsburg University of Pennsylvania

April 2017

This project was sponsored by a grant from the Center for Rural Pennsylvania, a legislative agency of the Pennsylvania General Assembly. The Center for Rural Pennsylvania is a bipartisan, bicameral legislative agency that serves as a resource for rural policy within the Pennsylvania General Assembly. It was created in 1987 under Act 16, the Rural Revitalization Act, to promote and sustain the

vitality of Pennsylvania’s rural and small communities. Information contained in this report does not necessarily reflect the views of individual board members or the Center for Rural Pennsylvania. For more information, contact the Center for Rural Pennsylvania, 625 Forster St., Room 902, Harrisburg, PA 17120, telephone (717) 787-9555, email: [email protected], www.rural.palegislature.us.

The Impact of Minimum Wage Increases in Rural and Urban Pennsylvania 2

Executive Summary 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.

The research was completed in seven stages. The initial stage was to consult with officials from the

Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis (CWIA) to

discuss data sources, and potential methodology and procedures used to identify the wage distribution in rural and

urban areas of Pennsylvania. The second stage was to review the academic, professional and government

literature, especially empirical studies and the methodology used to measure the impact of increasing minimum

wage on employment and income. The researchers employed the procedure used by the Congressional Budget

Office (CBO) in 2014 to analyze the effects of a minimum-wage increase on employment and income. The CBO

study examined the effects of two proposed options: an increase of the current minimum wage of $7.25 to $9.00

per hour and a larger increase from $7.25 to $10.10 per hour. The CBO study assumed that either the $9.00 or the

$10.10 option would be implemented in 2016 and 2017 and estimated their effects on national employment,

income and federal government revenue and expenditures. The third stage of the study was the construction of the

comprehensive database, which identified the number and socio-demographic characteristics of rural and urban

minimum and near-minimum wage workers in Pennsylvania.

Using data from the 2014 American Community Survey (ACS), Public Use Micro-data Sample (PUMS), the

researchers determined that 161,985 rural and 279,662 urban workers earned at or below minimum wage in 2014.

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. Most of the

minimum wage workers in Pennsylvania worked in the following industries: Accommodation and Food Services,

Retail Trade, and Healthcare and Social Assistance. The occupations with the most significant numbers of

minimum wage workers were: Food Preparation and Serving Related, Sales and Related, Office and

Administrative Support, and Transportation and Material Moving Occupations. 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.


Based on these projections, the researchers estimated that 844,577 Pennsylvania workers (310,376 rural, and

534,201 urban) will be directly and indirectly affected by the proposed increase in the minimum wage from

$7.25 to $9.00 in 2017. While most of these workers will receive an increase in income, this option may also

lead to job losses ranging from 7,650 to 15,300 based on the range of elasticity estimates, out of which 2,780 to

5,559 will be in rural areas, and 4,870 to 9,741 will be in urban areas. The $10.10 option will cause more

significant effects on both employment and income since a much larger number of people will be affected. If the

minimum wage is increased to $10.10 in 2017, the number of directly and indirectly affected workers is

estimated to reach 1,201,352, comprising 438,799 rural workers and 762,553 urban workers. Job losses under

the $10.10 option will range from a low of 28,667 to a possible high of 57,334, out of which 10,396 to 20,792

will be in rural areas, and 18,271 to 36,542 will be in urban areas.

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.


Table of Contents Introduction ..................................................................................................................................... 5

Goals and Objectives ...................................................................................................................... 9

Methodology ................................................................................................................................. 10

Results ........................................................................................................................................... 14

Descriptive Statistics ........................................................................................................ 14

Employment Effects ......................................................................................................... 28

Income Effects ................................................................................................................... 30

Income Gains ..................................................................................................................... 31

Income Losses ................................................................................................................... 31

Net Change in Income ....................................................................................................... 32

Effect on Poverty .............................................................................................................. 32

Effect on Government Expenditures for Anti-Poverty Programs...................................... 35

Conclusions ................................................................................................................................... 36

Bibliography .................................................................................................................................. 39

Statistical Appendix ...................................................................................................................... 46

Technical Appendix .................................................................................................................... 106


Introduction The Federal Fair Labor Standards Act of 1938 established the first minimum wage in an effort to establish

minimum living standards for low-income workers. Because of the general increase in wages over time, the

minimum wage needs to be adjusted upward so that minimum wage earners can keep pace with other workers.

Furthermore, as inflation erodes the purchasing power of the minimum wage, periodic increases are needed to

prevent the decrease in the real value of the minimum wage. Economic literature devoted to the effects of

minimum wage increases began to emerge after the passage of the Fair Labor Standards Act and these early

studies predicted that minimum wage increases would lead to decreases in employment, particularly among low-

wage earners.

The minimum wage rate in Pennsylvania was set at $7.25 an hour in 2009 when the federal minimum wage was

raised to that level. States are mandated to maintain a minimum wage level equal to or greater than the federal

minimum wage.

From 2009 to 2016, consumer prices rose by 11.6 percent thus eroding the purchasing power of the minimum

wage earners significantly.

On March 7, 2016, Governor Tom Wolf signed an executive order raising the minimum wage of Pennsylvania

state employees to $10.15 per hour from $7.25 per hour. The Governor then appealed to the General Assembly to

propose legislation raising the minimum wage for all Pennsylvania workers to $10.15 per hour.

Earlier, in February 2014, President Barack Obama signed an executive order raising the minimum wage of

federal contract workers to $10.10 per hour and proposed increases in the federal minimum wage.

The Congressional Budget Office (CBO) published The Effects of a Minimum Wage Increase on Employment

and Family Income in February 2014, estimating the effects of two possible minimum wage increases, the $9.00

per hour and the $10.10 per hour options. The $9.00 per hour option would be implemented in 2015 and the

$10.10 option would be introduced in three steps in 2016. At the writing of this report, neither the state nor the

federal minimum wage increases have been implemented.

The purpose of this study is to estimate the effects of an increase in the minimum wage in Pennsylvania,

assuming that such a change will be implemented in 2017. If the state minimum wage is not increased in 2017,

then the estimates of this study will have to be readjusted. The employment elasticities will remain the same but

the number of workers affected will be projected to the year when the new minimum wage takes effect, which

will slowly decrease over time as inflation pushes many low-wage earners to slightly higher nominal wages.1

1. Affected workers are those impacted by the minimum wage change; they include workers benefiting from the higher minimum wage as well as those who may lose their jobs.


This research explores the effects of both $9.00 and $10.10 options on the employment and income of rural and

urban Pennsylvania workers and their families. The research also identifies the socio-demographic characteristics

of minimum wage workers, and the industries and occupations employing significant numbers of minimum wage

earners.

To determine the number of minimum wage workers in rural and urban areas in Pennsylvania, the research

team used the 2014 Public Use Microdata Sample (PUMS), American Community Survey (ACS). For 2014, the

PUMS is a 1 percent sample of all Pennsylvania residents and households, along with their respective weights.

The weights represent the total population or the total number of households with similar characteristics. This has

enabled the estimation of the number of minimum wage earners in rural and urban Pennsylvania areas, the socio-

demographic characteristics of these workers, their industries of employment and their occupations.

The ACS was preferred over the Current Population Survey (CPS) because of the larger sample size and the

ability to focus on rural and urban areas. Also the ACS is based on place of work rather than place of residence.2

The database derived using PUMS enabled the researchers to determine the wage distribution, the number of

minimum wage workers in rural and urban areas in Pennsylvania, and workers’ age, gender, education, marital

status, race, industry of employment, occupation and other characteristics.

To estimate the employment and income effects of an increase in the minimum wage from $7.25 to either $9.00

or $10.10 an hour, this study used the methodology employed by the Congressional Budget Office (CBO).

Conventional economic theory predicts that an increase in the legal minimum wage will cause an increase in

unemployment among unskilled workers because (i) firms will hire fewer workers at the higher minimum wage,

and (ii) the higher minimum wage may serve as an incentive for new workers to seek employment.

Following the establishment of the first minimum wage by the Fair Labor Standards Act of 1938, a wave of

empirical studies aimed at estimating the economic effects of the minimum wage started appearing in the

professional literature. Some of the noteworthy studies in recent times are summarized below.

In 1982, Charles Brown, Curtis Gilroy and Andrew Kohen published The Effects of the Minimum Wage on

Employment and Unemployment in the Journal of Economic Literature to provide a comprehensive review of the

early literature devoted to minimum wage studies. The paper concluded that there is no great certainty in the

consequences of minimum wage increases since economic theory predictions are based on the assumption that all

other variables remain constant. Thus when studies compare employment and unemployment levels before and

after the minimum wage increase, it is difficult to determine whether the growth or decline in employment was

caused by the increase in the minimum wage or by other economic variables.

2. However, the Pennsylvania Center for Workforce Analysis uses the Current Population Survey (CPS) data to determine the characteristics of minimum wage workers in their Annual Minimum Wage Report.


However, most researchers agree that an increase in the minimum wage will cause a decrease in employment

among low-wage earners. Low-wage workers are generally unskilled and include teenagers and young adults. The

Brown, Gilroy and Kohen study reported that a 10 percent increase in the minimum wage would cause a reduction

in teenage employment of 1 to 3 percent. The reduction in young-adult employment (ages 20-24) was smaller

than teenage employment and adult employment was not significantly affected.

David Card and Alan Krueger published Minimum Wages and Employment: A Case Study of the Fast-Food

Industry in New Jersey and Pennsylvania, American Economic Review, September 1994. This was considered an

important new approach to estimating the effects of changes in the minimum wage based on actual data collected

from the areas, where the minimum wage changed (New Jersey) and where it was held constant (Pennsylvania).

The study concluded that no significant changes in employment occurred as a result of the increase in the

minimum wage.

A series of studies emerged from the Center on Wages and Employment Dynamics (CDED) at the University

of California, Berkeley in recent years. The Estimated Impact of a Proposed Minimum Wage Law for Sacramento,

published in August 2015 by Michael Reich, Annette Bernhardt, Ian Perry and Ken Jacobs, employed a very

similar methodology as the current study, using the ACS data and following the CBO procedure of estimating

employment and income effects. The Sacramento study estimated the direct and indirect effects of three gradual

increases in the minimum wage and concluded that these increases would contribute to higher incomes for 37

percent of the residents of the City of Sacramento. The increase in the minimum wage also contributed to higher

business costs leading to higher prices but no significant increases in unemployment. The effects on public

assistance programs were difficult to estimate because the increase in the minimum wage enabled some families

to rise above the poverty threshold but those whose jobs were eliminated became eligible for unemployment

benefits and other public assistance benefits.

Most empirical studies conclude that minimum wage increases have positive effects on the incomes of families

at the low end of the labor market, and reduce their reliance on public assistance. Minimum wage increases also

contribute to higher business costs and relatively moderate decreases in unskilled employment.

The Center for Workforce Information and Analysis (CWIA) of the Pennsylvania Department of Labor and

Industry, using data from the Current Population Survey (CPS), produces an annual report containing statistical

information on the demographic characteristics of workers earning minimum wage or less in Pennsylvania. The

results are published in the report, “Analysis of the Pennsylvania Minimum Wage.” The report identifies the

industries in Pennsylvania employing significant numbers of minimum wage workers and their occupations. In

addition, the report presents historical trends and comparisons between the minimum wage and the average wage

in the state.

A recent study by the Keystone Research Center, “Giving the Local Economy a Boost: The Impact of Raising

the Pennsylvania Minimum Wage to $10.10 per Hour by County,” released in 2015, estimated the number of

minimum wage workers and their characteristics for each county. The study concluded that the $10.10 an hour


minimum wage would generate $1.8 billion additional income for Pennsylvania residents directly and indirectly,

and the additional income would produce an increased demand for goods and services, leading to the creation of

6,000 new jobs throughout the state. The Keystone Research Center used the PUMS and CPS data but did not

estimate potential decreases in employment caused by higher business costs. This research uses the employment

elasticities estimated by the CBO to calculate possible losses in employment and income.

This research follows the CBO methodology of estimating the impact of the two proposed increases in the

minimum wage to calculate both the benefits and the costs associated with such increases.

The benefits include the gains in income to workers whose wages are below the proposed higher minimum

wage (direct effect), and also to workers whose wages are slightly higher than the new minimum wage but will

probably be adjusted upward because employers may attempt to maintain wage differentials among workers, but

the adjustments will be gradually phased out as the wages increase (indirect effect).3

The negative effects include higher business costs leading to higher prices for goods and services as well as

decreases in the number of jobs as firms substitute labor with other factors of production.

In summary, the positive effects of a higher minimum wage are:

• Increases in the income of workers earning below the new minimum wage.

• Increases in the income of workers whose wages may be adjusted upward.

• Increases in the demand for goods and services caused by the higher wages.

• Multiplier effects of the higher demand for goods and services.

• Higher tax revenues caused by higher incomes.

• Lower public assistance expenditures.

The negative effects of a higher minimum wage are:

• Decreases in the income of workers whose jobs are eliminated.

• Decreases in the demand for goods and services caused by higher prices.

• Multiplier effects of the reduced demand for goods and services due to lost income and higher prices.

• Decreases in consumer real income caused by inflation.

• Increases in unemployment.

• Increases in dependence on public assistance of unemployed workers.

3. There will also be multiplier effects; for example, increases in incomes due to higher minimum wage will lead to increased demand for goods and services creating additional income, employment etc.


The following section describes the goals and objectives of this report and the methodology used to achieve the

empirical results.

The Methodology section describes the process of constructing the comprehensive database containing

information on the numbers and characteristics of minimum wage workers in rural and urban Pennsylvania. This

section also outlines the procedure followed by the researchers to estimate the effects of raising the minimum

wage to $9.00 and $10.10 per hour on the employment levels of rural and urban Pennsylvanians in 2017. Higher

minimum wage will lead to higher incomes to benefited workers, and higher incomes cause some families to rise

above poverty levels and less reliance on public assistance programs.

Estimates of employment changes, income changes, and the effects on public assistance are presented in the

Results section of this report. The Statistical Appendix provides a comprehensive inventory of all tables, charts

and related information.

Goals and Objectives Goal 1: Literature Review

Objective 1: Review the academic, professional and government literature of empirical studies that estimate the

effects of minimum wage increases.

Objective 2: Analyze the methodology employed by the CBO for its 2014 Report to estimate the effects of federal

minimum wage increases on employment and income.

Objective 3: Consult with Pennsylvania Department of Labor and Industry officials to discuss the socio-

demographic and economic characteristics of minimum-wage earners in rural and urban Pennsylvania counties.

Goal 2: Database Construction

Objective 1: Using the ACS-PUMS, estimate the number of rural and urban minimum wage earners in

Pennsylvania.

Objective 2: Compile statistical information on the socio-demographic and economic characteristics of minimum

wage earners in rural and urban Pennsylvania counties.

Objective 3: Identify the industries that employ significant numbers of minimum wage earners and determine the

occupations of such workers.

Goal 3: Descriptive Statistics

Objective 1: Classify minimum wage earners into rural and urban Public Use Microdata Areas (PUMAs) and

determine socio-demographic and economic differences between rural and urban workers.

Objective 2: Rank rural and urban industries and occupations that employ substantial numbers of minimum or

near-minimum wage earners.


Goal 4: Estimate the Effects of Raising the Minimum Wage

Objective 1: Estimate the number of rural and urban workers directly and indirectly affected by the higher

minimum wage rate.

Objective 2: Project the number of workers potentially affected by the increase in the minimum wage in 2017.

Objective 3: Estimate the change in future levels of employment, taking into account the growth trends and

estimated employment elasticities, and determine upper and lower limits for these projections based on a range of

values for elasticity estimates.

Goal 5: Estimate Income Effects, Indirect Effects and Impact on Public Income-Maintenance Programs

Objective 1: Estimate the number of workers whose incomes will be increased directly or indirectly by the raising

of the minimum wage in Pennsylvania.

Objective 2: Estimate both positive and negative income effects caused by the higher minimum wage as the

incomes of those earning at or near-minimum wage are adjusted upward (positive), while the incomes of those,

whose jobs are eliminated (negative) are reduced.

Objective 3: Estimate the net effects of raising the minimum wage on public income maintenance programs.

Government income support expenditures may increase or decrease depending on the net income effect.

Methodology The section presents a detailed step-by-step approach of the process used by the researchers to determine the

effects of minimum wage increase on employment and income, and the impact on public income maintenance

programs.

Furthermore, this section describes the process adopted by the current study to derive the comprehensive

database for minimum wage workers in rural and urban Pennsylvania and to estimate the impact of the proposed

changes in the minimum wage in 2017.

The comprehensive database for this study was constructed by using the 2014 ACS-PUMS.

The sample was generated from all adults over 16 years old, employed by private for-profit and nonprofit

organizations, businesses and individuals, earning wages, salaries or commissions. Excluded were the

unemployed, people not in the labor force, government employees, self-employed or working in a family business

or farm without pay.4

4. The reasons for focusing only on the private sector workers are: most other empirical studies focus on private sector workers, and only a tiny fraction of government workers earn at or below the current minimum wage of $7.25 per hour.


The relevant universe of Pennsylvania workers consisted of 5,239,310 people in 2014 or 85.7 percent of the

total labor force in the state.

The ACS designates PUMAs as areas with 100,000 population or more. In Pennsylvania, there are 92 PUMAs.

When applying the Center for Rural Pennsylvania’s definition of rural/urban, which is based on population

density of less than or greater than 284 people per square mile, there are 30 rural and 62 urban PUMAs in

Pennsylvania.

Rural PUMAs consist of one or more rural counties and urban PUMAs are often fractions of urban counties.

The database generated for this study identifies workers employed in rural and urban PUMAs in Pennsylvania.

The hourly wage is not reported by the ACS but it was computed by dividing the annual earnings of workers by

the number of weeks worked per year and the usual hours worked per week.

The database classified low-wage workers into categories to determine the number of rural and urban workers,

who would be directly and indirectly affected by the proposed increase in the minimum wage in Pennsylvania

under both the $9.00 and $10.10 options.

Under the $9.00 option, the minimum wage for tip-workers will increase by the same percentage as the increase

in the minimum wage, i.e., to $3.51 per hour.5 Therefore, workers earning between $3.51 and $9.00 per hour will

be directly affected.

For the $9.00 option, the indirect effect was estimated by counting all workers who would be earning between

$9.00 and $9.88 per hour. The indirect effect is based on the assumption that some low wage earners will

experience an increase in wages to keep up with the higher wage rate received by minimum wage workers. The

$9.88 figure is estimated as equal to $9.00 plus 50 percent of the difference between the old minimum wage and

the new minimum wage.

The $10.10 option will raise the minimum wage for tip-workers to $4.90 by 2017, thus workers earning

between $4.90 and $10.10 will be directly affected by the increase in the legal minimum wage.

For the $10.10 option, the current study authors assume that the indirect effect will apply to workers earning

between $10.10 and $11.53 per hour. The $11.53 is estimated as equal to $10.10 plus 50 percent of the difference

between $7.25 and $10.10.

This study estimated the potential job losses of an increase in the minimum wage to $9.00 by 2017 by using the

computed employment elasticities reported in the 2014 CBO study. By definition, the employment elasticity

measures the percentage change in employment following a 1 percent change in the wage rate. The CBO

estimated the teenage employment elasticity, based on its review of economic literature, to be about -0.075. This

5. Under the $9.00 option, the percentage increase in the minimum wage from $7.25 to $9.00 is 24 percent. Hence, the minimum wage for tip-workers will also increase by the same 24 percent from the current $2.83 to $3.51 per hour.


means that a 10 percent increase in the wage rate will cause teenage employment to decrease by 0.75 percent.

Because of the great uncertainty of such estimates, the CBO suggested that teenage employment elasticity could

be as low as -0.15 or as high as zero.

Adult employment is expected to be less sensitive to increases in the minimum wage since most adults earn

higher than the minimum wage. The CBO estimates that adult employment elasticity is approximately one third of

teenage employment elasticity.

The CBO report expects that increasing the minimum wage to $9.00 an hour will not cause substantial effects

on employment and income.

However, raising the minimum wage to $10.10 will cause a larger reduction in both teenage and adult

employment since the increase from $7.25 to $10.10 represents a 39 percent increase compared to the 24 percent

increase when the rates go from $7.25 to $9.00. Firms experiencing a 39 percent increase in labor costs will react

more by making adjustments, such as reducing staff and substituting the more expensive minimum wage workers

with other factors of production, such as machines or better technology.

The estimated elasticity that the researchers for teenage employment under the $10.10 option is approximately

equal to -0.1, meaning that a 10 percent increase in the wage rate will decrease teenage employment by 1 percent.

Adult employment elasticity is again assumed to be one-third of the teenage employment elasticity.

There is considerable uncertainty in the responsiveness of employment to changes in wage rates since

employment is also dependent on national economic conditions. In other words, if a recession occurs in 2017,

decreases in employment will be substantially greater than predicted and similarly, higher growth in GDP may

cause an increase in employment in spite of the minimum wage increase.

Other uncertainties include the changes in the demand for goods and services caused by the increased

expenditures of workers earning higher minimum wages. The demand for goods and services may also decrease

due to the decreased expenditures caused by higher prices fueled by higher labor costs and the decreased

expenditures of those who lose their jobs.

To allow for some of this uncertainty, employment losses caused by increasing the minimum wage from $7.25

to $10.10 are estimated by using elasticities for teenage employment ranging from zero to - 0.2.

In summary, the methodology employed by the current study involved a series of steps:

1. The sample was generated from the PUMS 2014, ACS data for all adults over 16 years old, employed by

private for-profit and nonprofit organizations, businesses and individuals, earning wages, salaries or

commissions. Excluded were the unemployed, people not in the labor force, government employees, self-

employed or working in a family business or farm without pay.


2. The hourly wage distribution of workers was derived as the ratio of annual earnings divided by weeks

worked per year and usual hours of work per week.

3. Estimate the number and socio-demographic and economic characteristics of rural and urban minimum

wage and near-minimum6 wage workers in Pennsylvania in 2014. This process determined that 7.2

percent of all Pennsylvania workers in 2014 were minimum wage earners. The characteristics of these

workers are described in the Results section of this report and the comprehensive data tables and charts

are included in the Statistical Appendix.

4. The wage distribution was extrapolated to 2017 to estimate the number of rural and urban Pennsylvania

workers, who would be directly and indirectly affected in 2017, assuming that the increase in the

minimum wage will indeed be implemented in 2017. Extrapolated data were based on an overall inflation

rate of 4.6 percent for the period 2014-2017.7 The population change was based on 0.55 percent

compound annual growth rate estimated by the Pennsylvania Department of Labor and Industry’s CWIA.

5. Workers directly affected by the minimum wage increase were identified as all those earning below the

new minimum wage, and the workers indirectly affected were all those earning a little above the new

minimum wage.8 The projected wage distribution in 2017 was tabulated to identify the number of workers

directly and indirectly affected by the $9.00 and the $10.10 minimum wage options.

6. Job losses for teenage and adult workers caused by the $9.00 and $10.10 minimum wage options were

then estimated using the employment elasticities derived from the review of minimum wage empirical

studies.9

7. The final step was the estimation of the effect of the proposed increases in the minimum wage on public

assistance programs and the potential impact on government revenues and expenditures. This was

accomplished by comparing the 2014 household income distribution before and after the minimum wage

6. Minimum wage workers are those earning at or below the current minimum wage of $7.25 per hour; under the $10.10 option, the indirect effect ends at $11.53 per hour; hence, the ‘near-minimum wage’ workers are those earning up to $11.53 per hour. Footnote 8 provides detailed calculations. 7. Though individual minimum wage worker may or may not get cost of living adjustments, the study authors assume that an average minimum wage earner will be compensated for inflation (https://www.bls.gov/cpi/). 8. The study estimates indirect effect on workers earning above the new minimum wage up to 50 percent of the increase in the minimum wage. For example, if the minimum is increased from $7.25 to $9.00, the indirect effect is on workers earning from $9.01 to $9.01 + 50 percent of ($9.00 - $7.25) = $9.88. Similarly, for the $10.10 option, the indirect effect is on workers earning from $10.11 + 50 percent of ($10.10 - $7.25) = $11.53. This study uses a similar approach. 9. Most empirical studies assume that because the demand for low-skilled labor is highly inelastic, these job losses will not cause a substantial increase in government public assistance expenditures.

https://www.bls.gov/cpi/


increase. To create the household income distribution after the minimum wage increase, the 2017 wage

distribution incorporating the minimum wage increase was converted to 2014 dollars by dividing by the

4.6 percent inflation factor, and then the individual data was merged with the household data to calculate

how much the household income would have increased in 2014 due to minimum wage increase.

Results Descriptive Statistics

The empirical studies were particularly relevant because they identified the appropriate methodologies used to

generate statistical information and computational procedures for estimating the impact of minimum wage

adjustments on employment and income.

The CBO’s 2014 Report was particularly relevant for the present study because it examined in great detail the

effects of two specific increases in the minimum wage on the employment and income of the nation.

The CBO Report discussed the procedure for estimating the number of workers that would be directly and

indirectly affected by the minimum wage increases and outlined a detailed step-by-step approach for estimating

the responsiveness of employment to the minimum wage increases under both the $9.00 and the $10.10 options.

This study followed the CBO methodology but used a different database to estimate the number of workers

who potentially would be affected by the minimum wage increases. The CBO study used statistical data published

by the Census Bureau’s Current Population Survey (CPS), which focuses on the U.S. civilian population,

determined the distribution of hourly wages and estimated the number of workers who would be affected by the

higher minimum wage.

This study used the 2014 ACS-PUMS to estimate the number of workers who would be affected by the increase

in the minimum wage in rural and urban areas in Pennsylvania.

The comprehensive database was constructed by using PUMS to estimate the wage distribution of workers in

Pennsylvania during 2014 and identify their characteristics.

ACS-PUMS provides significantly larger sample sizes than the Current Population Survey (CPS) and allows

the construction of samples based on place of work, rather than place of residence.10

ACS data do not provide a measure of hourly wages, so the hourly wage was computed based on the workers’

annual earnings, the estimated number of weeks worked and the usual hours worked per week.

In addition, ACS generates data representative of PUMAs that may be classified as either rural or urban, thus

providing the means of identifying differences between rural and urban areas.

10. The study authors thank officials from the Pennsylvania Department of Labor and Industry for their valuable input in this project.


A list of all rural and urban PUMAs in Pennsylvania is presented in the Statistical Appendix, along with their

population and population density estimated for 2012 by the Census.

Rural PUMAs consist of either one or more rural counties whose population exceeds 100,000 and density is

below the state average of 284 people per square mile. Urban PUMAs are concentrated around the Philadelphia

and Pittsburgh metropolitan areas and the cities of Erie, Scranton and Wilkes Barre, and consist of fragments of

urban counties whose populations exceed 100,000 and density exceed 284. The geographic location of the 30

rural and 62 urban PUMAs is depicted in Map 1.

Map 1: Pennsylvania’s 2012 PUMAs

Source: The Center for Rural Pennsylvania

The data analyzed in this study cover workers aged 16 and above with earned income during 2014 from private

for-profit or nonprofit employment in Pennsylvania.

Though the current U.S. and Pennsylvania laws require a minimum wage of $7.25 per hour, employers can pay

workers as low as $2.83 per hour if they receive tipped income to make up the rest. If and when the minimum

wage is increased, the tipped minimum wage will also increase, and hence, all those workers receiving $2.83 -

$7.25 will be affected. For the purpose of this study, minimum wage workers are defined as those workers earning

an hourly wage between $2.83 (the legal minimum for tip-earners) and $7.25, the legal minimum wage rate.


Analysis of the Pennsylvania Minimum Wage in 2014, published by CWIA, compared the socio-demographic

characteristics of workers earning $7.25 or less per hour in Pennsylvania and the U.S., which is shown in Table 1.

In general, the characteristics of minimum wage workers are similar between the U.S. and Pennsylvania during

2014.

In Pennsylvania, the minimum wage workers were mostly female (63 percent), young (almost half of them are

below age 24), white (61 percent), less educated (54 percent high school or less), and never married (66 percent).

Following are a series of charts and tables that indicate if there are any significant differences between rural and

urban Pennsylvania workers earning minimum wage or less.

Table 1: Socio-Demographic Characteristics of Workers Earning Minimum Wage or Less in U.S. and Pennsylvania

Source: Analysis of the Pennsylvania Minimum Wage in 2014,

Pennsylvania Department of Labor & Industry, Center for Workforce Information Analysis.

CWIA CWIAUS PA

Total 3,012,000 157,500

Gender Male 26% 37% Female 74% 63%

Race Black, non-Hispanic 7% 14% Hispanic 4% 17% Other, non-Hispanic 10% 7% White, non-Hispanic 79% 61%

Age 16-19 30% 21% 20-24 23% 27% 25-34 17% 22% 35-44 11% 11% 45-54 7% 9% 55-64 8% 7% 65 and over 4% 3%

Education Less than a high school diploma 20% 23% High school graduate, no college 41% 31% Some college, no degree 29% 30% Associate degree 2% 7% Bachelor's degree or higher 8% 9%

Marital Status Married Spouse Present 18% 22% Marital Status Other 11% 12% Never Married 72% 66%

Minimum Wage or Below*


Chart 1: Gender of Pennsylvania Workers Earning $2.83 - $7.25

Source: 2014 ACS 1-year Public Use Microdata Samples (PUMS).

Note: Gender differences between urban and rural PA are not statistically different at 5 percent level.

Minimum wage workers in Pennsylvania were mostly female. There were no significant gender differences

between rural and urban Pennsylvania minimum wage workers.

Chart 2: Race of Pennsylvania Workers Earning $2.83 - $7.25


Note: ** indicates that the rural-urban differences are statistically significant at 5 percent level.

Minimum wage workers in Pennsylvania were mostly white. There were significantly more non-whites among

urban Pennsylvania minimum wage earners.


Chart 3: Age Distribution of Pennsylvania Workers Earning $2.83 - $7.25



Minimum wage workers in Pennsylvania were predominantly younger; two-thirds of these workers were under

35 years old. Though the age distribution between rural and urban counties was similar among minimum wage

earners, there were significantly more teenagers in rural Pennsylvania earning minimum wage or less.

Chart 4: Educational Attainment of Pennsylvania Workers Earning $2.83 - $7.25



Almost 80 percent of minimum wage workers in Pennsylvania did not have a college degree. The distribution

of educational attainment between rural and urban counties was similar among minimum wage earners: it was


interesting to note that significantly more college-educated workers were minimum wage earners in urban

counties compared to rural counties.

Chart 5: Marital Status of Pennsylvania Workers Earning $2.83 - $7.25



Almost two-thirds of minimum wage workers in Pennsylvania were never married. Marital status distribution

between rural and urban counties is similar among minimum wage earners.

Chart 6: English Speaking Ability of Pennsylvania Workers Earning $2.83 - $7.25




Most minimum wage earners in Pennsylvania were English speaking. Less than 5 percent have difficulty

communicating in English. English speaking ability among minimum wage earners was much better in rural

counties compared to urban counties.

Chart 7: Percentage of Pennsylvania Workers with a Disability

by Minimum Wage and Near-Minimum Wage



Almost 90 percent of minimum wage earners in Pennsylvania had no disability. The percentage of minimum

wage earners with a disability was significantly higher in rural counties than urban counties.

Chart 8: Percentage of Pennsylvania Workers Receiving Government Health Assistance by

Minimum Wage and Near-Minimum Wage


Note: There is statistically no difference between rural and urban areas at 5 percent level.


Less than 15 percent of minimum wage earners in Pennsylvania received government health assistance. The

distribution of health assistance among minimum wage earners is similar between rural and urban counties.

Chart 9: Percentage Pennsylvania Workers Receiving Public Assistance Income by Minimum

Wage and Near-Minimum Wage



Less than 3 percent of minimum wage earners in Pennsylvania received public assistance income during 2014.

However, a significantly higher percentage of low-wage earners received public assistance income in urban


Chart 10: Average Public Assistance Income Received by Minimum and Near-Minimum Wage Pennsylvania Workers




Interestingly, minimum wage earners received less public assistance income compared to those earning slightly

more than $7.25 per hour, possibly due to lower Earned Income Tax Credits.

Chart 11: Percentage of Pennsylvania Workers Receiving Supplementary Security Income by Minimum Wage and Near-Minimum Wage



Less than 2 percent of minimum wage earners in Pennsylvania received supplementary security income (SSI)

during 2014. A significantly higher percentage of workers earning above $7.25 per hour received SSI in urban


Chart 12: Average Supplementary Security Income Received by Pennsylvania Workers by Minimum Wage and Near-Minimum Wage




There was no noticeable difference in the distribution of average supplementary security income between rural

and urban counties in Pennsylvania during 2014.

Chart 13: Most Common Modes of Transportation by Pennsylvania Workers Earning $2.83 - $7.25


Note: ** indicates that the rural-urban differences are statistically significant at 5 percent level. Surprisingly, two-thirds of minimum wage earners drove to work, and not so surprisingly, a significantly higher

percentage of minimum wage workers either walk or take public transportation to work in urban areas.

Chart 14: Commuting Time to Work for Pennsylvania Workers Earning $2.83 - $7.25




The majority of minimum wage workers in Pennsylvania commute 15 minutes or less to work; in general,

commuting time to work was higher in urban counties than rural counties.

Pennsylvania’s minimum wage workers were primarily employed in three industries:

• Accommodation and Food Services

• Retail Trade

• Healthcare and Social Assistance

A more complete list of the number and percentage of minimum wage workers employed by various industries

in Pennsylvania during 2014 is presented in Table 2.

As shown in Table 2 and Chart 15, there were no substantial differences in the distribution of minimum wage

workers between rural and urban areas. The industries that predominantly employ minimum wage workers were

the same in both rural and urban counties.

Chart 15: Industries Employing a Higher Percentage of Pennsylvania Workers Earning $2.83 - $7.25




Table 2: Minimum Wage Pennsylvania Workers by Industry



INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 2136 479921 Mining, Quarrying, and Oil and Gas Extraction 618 5822 Utilities 0 46823 Construction 4171 758531-33 Manufacturing 9186 2040642 Wholesale Trade 1771 455444-45 Retail Trade 34905 6125648-49 Transportation and Warehousing 4740 750651 Information 1130 352852 Finance and Insurance 1501 349653 Real Estate and Rental and Leasing 1364 292354 Professional, Scientific and Technical Services 2294 776455 Management of Companies and Enterprises 0 42856 Administrative and Support and Waste Management and Remediation Services 6770 1670461 Educational Services 8156 1371562 Health Care and Social Assistance 23385 3491771 Arts, Entertainment, and Recreation 7473 1136972 Accommodation and Food Services 43424 6383081 Other Services, except Public Administration 8961 14356

Total 161985 279662Percentage 37% 63%GRAND TOTAL 441647

INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 1% 2%21 Mining, Quarrying, and Oil and Gas Extraction 0% 0%22 Utilities 0% 0%23 Construction 3% 3%31-33 Manufacturing 6% 7%42 Wholesale Trade 1% 2%44-45 Retail Trade 22% 22%48-49 Transportation and Warehousing 3% 3%51 Information 1% 1%52 Finance and Insurance 1% 1%53 Real Estate and Rental and Leasing 1% 1%54 Professional, Scientific and Technical Services 1% 3%55 Management of Companies and Enterprises 0% 0%56 Administrative and Support and Waste Management and Remediation Services ** 4% 6%61 Educational Services 5% 5%62 Health Care and Social Assistance ** 14% 12%71 Arts, Entertainment, and Recreation 5% 4%72 Accommodation and Food Services ** 27% 23%81 Other Services, except Public Administration 6% 5%

100% 100%

Percentage of Pennsylvania Workers

Hourly Wage $2.83 to $7.25


Number of Pennsylvania Workers


Table 3 presents a list of the number and percentage of minimum wage workers employed in various

occupations in Pennsylvania during 2014.

The occupations with the most significant number of minimum wage workers were:

• Food Preparation and Serving Related Occupations

• Sales and Related Occupations

• Office and Administrative Support Occupations

• Transportation and Material Moving Occupations

As can be seen from Table 3 and Chart 16, the distribution of occupations of minimum wage workers were

basically the same in both rural and urban counties.

Chart 16: Major Occupations of Pennsylvania Workers Earning $2.83 - $7.25


Note: Rural-Urban differences for occupations with ** are statistically significant at 5 percent level.


Table 3: Minimum Wage Pennsylvania Workers by Occupation



Occupation RURAL URBAN11 Management Occupations 1965 672513 Business and Financial Operations Occupations 1495 421215 Computer and Mathematical Occupations 421 167517 Architecture and Engineering Occupations 489 85519 Life, Physical, and Social Science Occupations 123 67021 Community and Social Services Occupations 2574 253723 Legal Occupations 0 29925 Education, Training, and Library Occupations 5036 1005427 Arts, Design, Entertainment, Sports, and Media Occupations 1105 360229 Healthcare Practitioners and Technical Occupations 2531 578031 Healthcare Support Occupations 5591 1059533 Protective Service Occupations 3576 419335 Food Preparation and Serving Related Occupations 38813 5480537 Building and Grounds Cleaning and Maintenance Occupations 9962 1753139 Personal Care and Service Occupations 11582 1748741 Sales and Related Occupations 27796 5067643 Office and Administrative Support Occupations 19161 3236145 Farming, Fishing, and Forestry Occupations 1827 346947 Construction and Extraction Occupations 4017 552649 Installation, Maintenance, and Repair Occupations 1944 308251 Production Occupations 6360 1547353 Transportation and Material Moving Occupations 15617 28055


Occupation RURAL URBAN11 Management Occupations 1% 2%13 Business and Financial Operations Occupations 1% 2%15 Computer and Mathematical Occupations 0% 1%17 Architecture and Engineering Occupations 0% 0%19 Life, Physical, and Social Science Occupations 0% 0%21 Community and Social Services Occupations 2% 1%23 Legal Occupations 0% 0%25 Education, Training, and Library Occupations 3% 4%27 Arts, Design, Entertainment, Sports, and Media Occupations 1% 1%29 Healthcare Practitioners and Technical Occupations 2% 2%31 Healthcare Support Occupations 3% 4%33 Protective Service Occupations 2% 1%35 Food Preparation and Serving Related Occupations ** 24% 20%37 Building and Grounds Cleaning and Maintenance Occupations 6% 6%39 Personal Care and Service Occupations 7% 6%41 Sales and Related Occupations 17% 18%43 Office and Administrative Support Occupations 12% 12%45 Farming, Fishing, and Forestry Occupations 1% 1%47 Construction and Extraction Occupations 2% 2%49 Installation, Maintenance, and Repair Occupations 1% 1%51 Production Occupations ** 4% 6%53 Transportation and Material Moving Occupations 10% 10%

100% 100%






Comprehensive summary tables and charts describing the socio-demographic characteristics of minimum wage

and near-minimum wage workers in rural and urban Pennsylvania during 2014 are included in the Statistical

Appendix.

In summary, there were many similarities between rural and urban minimum wage earners: they were mostly

female, white, younger, never married, with a high school or less, speaking English, driving to work, commuting

less than 15 minutes to work, and employed in services, such as retail trade and hospitality.

Based on the empirical evidence presented above, there seems to be no significant industrial or occupational

differences between rural and urban minimum wage workers in Pennsylvania.11

However, there were some shades of difference between rural and urban Pennsylvania minimum wage earners.

Rural workers were significantly more white and more were teenagers, a higher percentage have a high school

diploma or less, more speak English, more had a disability, and they spend less time commuting to work.

Employment Effects

The comprehensive database generated through the ACS-PUMS identified the number of minimum and near-

minimum wage earners in rural and urban Pennsylvania in 2014.

The next step was to extrapolate the wages to 2017 by applying the CPI inflation rates calculated by the U.S.

Bureau of Labor Statistics, which was 4.6 percent between 2015 and 2017.

Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all

Pennsylvania workers from the Pennsylvania Department of Labor and Industry's CWIA for 2014-2024, which

was 0.55 percent per year.

Based on the above projections, the researchers estimated that 844,577 Pennsylvania workers will be directly

and indirectly affected by the proposed increase in the minimum wage from $7.25 to $9.00. The $9.00 option will

affect 310,376 rural and 534,201 urban Pennsylvania workers either directly or indirectly.

Most of these workers will experience an increase in income but a small percentage will lose their jobs as

shown in the following tables.

11. As can be seen from the charts and tables in the Statistical Appendix, the socio-demographic characteristics of near-minimum wage workers differ only slightly from the minimum wage workers. For example, compared to minimum wage workers, near-minimum wage workers are slightly older, are a bit more educated, a higher percentage is married and a higher percentage drive to work.


Table 4A: Estimated Number of Workers Directly and Indirectly Affected by Minimum Wage Increase to $9.00 in 2017


Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $9.00. 4. Wages for indirectly affected workers = $9.01 to $9.88. 5. ** Margin of error (95% confidence level) for the total number of workers affected: Rural = 3.2%; Urban = 2.4%; PA = 2.0%.

Table 4B: Estimated Number of Workers Directly and Indirectly Affected by Minimum Wage Increase to $10.10 in 2017

Source: 2014 ACS 1-year Public Use Microdata Samples (PUMS). Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI

inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $10.10. 4. Wages for indirectly affected workers = $10.11 to $11.53. 5.**

Margin of error (95% confidence level) for the total number of workers affected: Rural = 2.9%; Urban = 2.0%; PA = 1.7%.

If the minimum wage is increased to $10.10 in 2017, the number of directly and indirectly affected workers is

estimated to reach 1,201,352, comprising 762,553 urban workers and 438,799 rural workers.

These findings are consistent with the CBO conclusion that the $10.10 option will have more significant impact

on both the income and employment of minimum wage and near-minimum-wage workers.

% of PA % of PA % of PARural Direct 42,715 36% Rural Direct 210,999 29% Rural Direct 253,714 30%

Indirect 4,930 4% Indirect 51,732 7% Indirect 56,662 7%Total 47,645 40% Total 262,731 36% ** Total 310,376 37%

Urban Direct 64,673 54% Urban Direct 376,404 52% Urban Direct 441,077 52%Indirect 7,127 6% Indirect 85,996 12% Indirect 93,124 11%Total 71,801 60% Total 462,400 64% ** Total 534,201 63%

PA Direct 107,389 90% PA Direct 587,402 81% PA Direct 694,791 82%Indirect 12,057 10% Indirect 137,729 19% Indirect 149,786 18%Total 119,446 100% Total 725,131 100% ** Total 844,577 100%

Estimated Number of Workers Directly and Indirectly Affected by Minimum Wage Increase to $9 in 2017

Teenagers (16-19 years old) Adults (20 years and older) All Workers

% of PA % of PA % of PARural Direct 48,317 34% Rural Direct 279,328 26% Rural Direct 327,644 27%

Indirect 4,836 3% Indirect 106,319 10% Indirect 111,155 9%Total 53,152 38% Total 385,647 36% ** Total 438,799 37%

Urban Direct 74,412 53% Urban Direct 487,921 46% Urban Direct 562,333 47%Indirect 13,035 9% Indirect 187,185 18% Indirect 200,220 17%Total 87,447 62% Total 675,106 64% ** Total 762,553 63%

PA Direct 122,729 87% PA Direct 767,249 72% PA Direct 889,978 74%Indirect 17,871 13% Indirect 293,504 28% Indirect 311,375 26%Total 140,600 100% Total 1,060,753 100% ** Total 1,201,352 100%

Estimated Number of Workers Directly and Indirectly Affected by Minimum Wage Increase to $10.10 in 2017

Teenagers (16-19 years old) Adults (20 years and older) All Workers


Most economists agree that a modest increase in the minimum wage will cause a very small decrease in

employment. The job losses caused by the $9.00 option will be smaller than those caused by the $10.10 option

because the percentage increase in the minimum wage from $7.25 to $9.00 is much smaller (24 percent) than the

percentage increase in the minimum wage from $7.25 to $10.10 (39 percent).

In the long run, some of these job losses may be offset by the increases in income of low-wage workers, who

have higher propensities to consume, and whose increased expenditures on goods and services will lead to the

creation of new jobs (the multiplier effect) thus offsetting some of the job losses caused by the initial increase in

the minimum wage.

The research estimated that if the minimum wage in Pennsylvania is raised to $9.00 per hour in 2017, total job

losses may range from 7,650 to 15,300 (± 2.0 percent)12. Under the $10.10 option, the expected job losses in 2017

may range from 28,667 to 57,334 (±1.7 percent)13. (For details, see the Statistical Appendix).

The estimated number of job losses will be greater in urban areas than in rural areas because most workers are

employed in urban areas; however, there is no significant difference in the percentage of job losses between rural

and urban areas. These results are similar to those found in a recent study by Hanson and Hawley, who estimated

the range of jobs lost under the $10.10 option to be between 8,253 and 64,215 for Pennsylvania. This study

estimated the range of job losses from the $10.10 option to be between 28,667 and 54,452.

Income Effects

An increase in the minimum wage will cause an increase in the incomes for all workers, who were paid below

the new minimum wage ($9.00 or $10.10). This is called the direct effect.

Workers earning slightly above the new minimum wage may also receive wage increments as firms attempt to

maintain some of the old wage differentials. This is called the indirect effect.

Under the $9.00 proposal, it is estimated that workers who were earning close to $9.00 will receive slightly

more than $9.00 per hour when the new $9.00 minimum wage is implemented. In other words, firms who were

paying unskilled workers $7.25 and slightly more skilled workers $9 under the old minimum wage law will not

pay both types of workers $9.00 per hour when the legal minimum is raised to $9.00 per hour. This is the indirect

effect. Most empirical studies suggest that this indirect effect is likely to occur. This study estimates that the

indirect effect occurs from $9.00 to $9.88 per hour. (See Footnote 8)

Similarly, under the $10.10 option, the indirect effect is estimated to occur from $10.10 to $11.53 per hour.

12. Rural = 2,780 to 5,559; Urban = 4,870 to 9,741. 13. Rural = 10,396 to 20,792; Urban = 18,271 to 36,542.


Some of these workers will, however, experience a decrease in income if their jobs are eliminated. The $10.10

option will have significantly larger effects on employment and income than the $9.00 option because a larger

number of workers will receive income increases, and more job losses will occur as firms substitute low-wage

workers with machines, or better technology. The net change in total income will be equal to the increase in

incomes to all workers earning below the new minimum wage (direct effect) and some workers earning slightly

above the minimum wage (indirect effect), minus the income of those whose jobs are eliminated.

Income Gains

Income gains associated with an increase in the minimum wage for both the $9.00 option and $10.10 option

were determined by estimating the increased income that is expected to occur in 2017 by assuming that each

worker continues to work the same number of hours at the higher wage. For this calculation, it was assumed that

the ripple effect begins at $7.25 for both the $9.00 and $10.10 options. As an example, a worker earning $8.90

before the minimum wage increase is expected to see an increase in his/her wage by more than $0.10 under the

$9.00 option to maintain comparable pay differences among a company’s low-wage worker (See the Technical

Appendix for the methodology).

Under the $9.00 option, all workers earning $9.00 or less per hour will be directly benefited and those earning

$9.01 to $9.88 per hour will be indirectly benefited when the minimum wage is increased to $9.00 per hour. For

all directly and indirectly benefited workers, income would increase by $778,441,372, with 37 percent of the

increase going to rural workers and 63 percent going to urban workers. This increase represents 0.3 percent of the

wage and salary income reported by the U.S. Bureau of Economic Analysis for 2014.

Under the $10.10 option, workers earning $10.10 or less per hour will be directly benefited and those earning

$10.11 to $11.53 per hour will be indirectly benefited when the minimum wage is increased to $10.10 per hour.

For all directly and indirectly benefited workers, income would increase by $2,252,445,137, or 0.8 percent of

Pennsylvania wage and salary income in 2014, with 37 percent going to rural and 63 percent going to urban

workers.

Income Losses

Income losses would occur when workers lose their jobs as the minimum wage increases. The income losses

may range between $27,037,649 and $54,075,299 under the $9.00 option, and between $103,681,477 and

$207,388,111 under the $10.10 option.


Net Change in Income

The estimated net gain in income under the $9.00 option ranges between $724 million and $751 million (±4.3

percent). Under the $10.10 option, the net gain is estimated to range between $2.05 billion and $2.15 billion (±3.6

percent).14

Effect on Poverty

Minimum wage increases will move a significant number of households out of poverty. The U.S. Department

of Health and Human Services uses the following thresholds to determine the eligibility requirements for income

support programs.

Table 5: Federal Poverty Guidelines

Source: Federal Register, Vol. 79, No. 14, Wednesday, Jan. 22, 2014, p.3593.

The number of Pennsylvania households that would be moved out of poverty by the minimum wage increases

were calculated by assuming that the minimum wage would be introduced in 2017. To calculate the number of

Pennsylvania households moved above the poverty line, the researchers merged the population data with income

gains due to minimum wage increases and the household data. The numbers were then deflated (4.6 percent) to

2014 by using the CPI inflation rates calculated by the U.S. Bureau of Labor Statistics.

Under the $9.00 option, 2,634 (32,625 – 29,991) rural households and 7,269 (66,189 – 58,920) urban

households will be lifted out of poverty. Thus, 9,903 households will be lifted out of poverty (See Tables 6A and

6B).

14. For details about the Margin of Error calculations, please refer to Appendix 3 & 4, ‘A Compass for Understanding and Using ACS Data,’ October 2008. https://www.census.gov/content/dam/Census/library/publications/2008/acs/ACSGeneralHandbook.pdf.

Persons in Family/Household Poverty Guideline 1 $11,670 2 $15,730 3 $19,790 4 $23,850 5 $27,910 6 $31,970 7 $36,030 8 $40,090

For families/households with more than 8 persons, add $4,060 for each additional person.

https://www.census.gov/content/dam/Census/library/publications/2008/acs/ACSGeneralHandbook.pdf


Table 6A: Change in the Number of Rural Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $9.00


Table 6B: Change in the Number of Urban Pennsylvania Households below

Poverty Level Before and After Minimum Wage Increase of $9.00


Similarly, under the $10.10 option, 7,547 (38,899 – 31,352) rural households and 21,347 (77,316 – 55,969)

urban households will be lifted out of poverty. Thus, 28,894 Pennsylvania households will be lifted out of poverty

(See Tables 7A and 7B).

Number of Persons in Rural HH

Total Number of Rural HH

Number of Rural HH below Poverty Level

- Before MW change

Number of Rural HH below Poverty Level - After MW change

1 26,898 4,470 3,8732 67,291 8,369 7,0893 55,163 6,866 6,6004 45,028 6,957 6,7015 22,816 3,070 2,8356 8,819 1,633 1,6337 1,908 199 1998 1,003 256 2569 510 22 22

10 274 172 17211 713 524 52412 0 0 013 396 87 8720 28 0 0

Total Number of Rural HH 230,847 32,625 29,991% of Rural HH 14.1% 13.0%

Number of Persons in Urban HH

Total Number of Urban HH

Number of Urban HH below Poverty Level - Before MW change

Number of Urban HH below Poverty Level - After MW change

1 46,814 12,894 11,5232 107,866 16,656 13,4713 96,765 13,865 12,5794 79,092 10,677 9,9885 39,002 5,945 5,5476 17,646 2,791 2,7917 5,518 1,515 1,4338 3,880 846 7649 1,057 392 392

10 196 46 4611 288 288 28812 425 274 9813 507 0 020 0 0 0

Total Number of Urban HH 399,056 66,189 58,920% of Urban HH 16.6% 14.8%


Table 7A: Change in the Number of Rural Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $10.10


Table 7B: Change in the Number of Urban Pennsylvania Households below

Poverty Level Before and After Minimum Wage Increase of $10.10





- Before MW change


1 40,659 6,023 4,3722 98,793 9,925 7,5013 75,726 7,927 6,9904 59,418 7,720 6,5055 30,654 3,685 2,6386 11,343 2,309 2,2307 2,267 249 2498 1,967 256 2569 510 22 0

10 274 172 011 713 524 52413 396 87 8720 28 0 0






1 68,066 15,138 9,1762 156,312 18,238 12,1713 136,718 16,367 10,9534 105,124 12,824 10,6195 51,599 7,615 6,6196 22,737 3,279 3,0847 8,291 1,862 1,6128 6,054 993 9119 1,103 392 392

10 294 46 4611 418 288 28812 425 274 9813 507 0 0



Table 8: Number of Households Affected by Minimum Wage Increase in 2017



Please note that due to the differences between population and household weights in the PUMS data, the total

number of workers affected slightly differs depending on which weight is used. The number of workers affected

in Table 8 is based on the population weights, which in the researchers’ opinion is more appropriate when dealing

with the number of workers.

Effect on Government Expenditures for Anti-Poverty Programs.

State and federal governments save money when households move out of poverty and no longer receive public

assistance. The government also gains revenues as workers begin paying taxes, or move into higher tax brackets.

Calculating the overall impact on the government budget, however, suffers from a variety of uncertainties. Some

eligible households never apply for assistance from any program for which they are entitled. In addition, some

households only apply for assistance from some, but not all programs. Finally, program benefits are phased out as

Rural Urban PennsylvaniaNumber of HH with 1 Affected Worker 201,389 353,687 555,076Number of HH with 2 Affected Workers 26,631 39,667 66,298Number of HH with 3 Affected Workers 2,081 4,790 6,871Number of HH with 4 Affected Workers 746 912 1,658Total Number of HH 230,847 399,056 629,903

Number of Households (HH) Affected by Minimum Wage Increase to $9/hr

Note: 830,791 workers earning $2.83 - $9.88 per hour will be affected

Rural Urban PennsylvaniaNumber of HH with 1 Affected Worker 272,693 481,045 753,738Number of HH with 2 Affected Workers 43,623 64,846 108,469Number of HH with 3 Affected Workers 5,258 10,294 15,552Number of HH with 4 Affected Workers 1,174 1,343 2,517Number of HH with 5 Affected Workers 0 120 120Total Number of HH 322,748 557,648 880,396

Number of Households (HH) Affected by Minimum Wage Increase to $10.10/hr

Note: 1,181,746 workers earning $2.83 - $11.53 per hour will be affected


household income increases. This complexity was recognized in the CBO report. Hence, this research could not

calculate the change in government support due to the unavailability of suitable data.

However, a recent report published by the CBO, “Growth in Means-Tested Programs and Tax Credits for Low-

Income Households” (Feb. 2013), included an assessment of the benefits received by low-income households by

means-tested programs. In means-tested programs, eligibility depends on household income instead of other

criteria, such as age, which determines eligibility for the Social Security and Medicare programs.

The CBO determined that for the lowest income quintile of households, the average federal support was $8,800

per household in 2012 dollars. The majority of the expenditures were for healthcare, cash assistance, and tax

credit programs. The $8,800 was inflated to $9,075 in 2014 using the CPI annual inflation rates for 2013 and

2014.

Applying the $9,075 to the number of households lifted out of poverty reported above suggests that the federal

government will save $89,869,725 if the minimum wage is increased to $9.00 and $262,213,050 if it is increased

to $10.10.15

Conclusions There have been serious discussions at both the state and national levels to increase the minimum wage from

the current $7.25 per hour. This study attempts to measure the impact of raising the minimum wage on the state’s

employment, income, and poverty level.

The purpose of this study was to estimate the effects of an increase in 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. The research team used the 2014 ACS-PUMS data because of the larger sample size and the ability to

estimate the impact on urban and rural areas.

The data analyzed in this study covers workers aged 16 and older with earned income during 2014 from private

for-profit or nonprofit employment in Pennsylvania. For the purpose of this study, minimum wage workers are

defined as those workers earning an hourly wage between $2.83 (the legal minimum for tip-earners) and $7.25,

the legal minimum wage rate. The ‘near-minimum wage’ workers include those workers indirectly affected by

minimum wage increases when employers attempt to maintain a wage differential, which is estimated up to

$11.53 per hour, among low-wage workers.

15. These numbers do not include any increases in tax revenues paid by the workers earning higher incomes due to minimum wage increases.


Many empirical studies showed that the minimum wage workers in Pennsylvania and the U.S. shared similar

socio-demographic characteristics; they were mostly female, young, white, high school or less educated and never

married.

The researchers conducted this study to determine if there were significant differences between rural and urban

Pennsylvania workers earning minimum wage or less. The study results showed that there were many similarities

between rural and urban minimum wage earners in Pennsylvania. For example, Pennsylvania minimum wage

workers are mostly female, white, younger, never married, with a high school diploma or less, speaking English,

driving to work, commuting less than 15 minutes to work, and employed in services such as retail trade and

hospitality. There seemed to be no significant industrial or occupational differences between rural and urban

minimum wage workers in Pennsylvania. There were only shades of difference between rural and urban

Pennsylvania minimum wage earners as follows; rural workers were significantly more white, more were

teenagers, a higher percentage of rural workers had a high school diploma or less, more were English speaking,

more had disabilities, and they spend less time commuting to work.

Next, the project reviewed and summarized relevant empirical literature dealing with the effects of minimum

wage increases on employment, income and income maintenance programs. The most noteworthy was the study

by the Congressional Budget Office, which published The Effects of a Minimum Wage Increase on Employment

and Family Income, February 2014 estimating the effects of two possible minimum wage increases, the $9.00 per

hour and the $10.10 per hour options on the national economy. Given the thoroughness of the CBO approach, and

the similarity of objectives between its report and this research, the researchers adopted the CBO methodology to

estimate the impact of minimum wage increases on the Pennsylvania economy.

To estimate the number of workers affected, the researchers extrapolated wages to 2017 by applying the

inflation estimates from the CPI, and employment level to 2017 by applying the estimated employment growth

rates by the Pennsylvania Department of Labor and Industry. Based on these projections, the researchers

estimated that 844,577 Pennsylvania workers (310,376 rural, and 534,201 urban) will be directly and indirectly

affected by the proposed increase in the minimum wage from $7.25 to $9.00. If the minimum wage is increased to

$10.10 in 2017, the number of directly and indirectly affected workers is estimated to reach 1,201,352,

comprising 438,799 rural workers and 762,553 urban workers.

To calculate the number of job losses due to minimum wage increases, the researchers applied the estimated

employment elasticities on the projected 2017 employment. Based on these calculations, the researchers estimated

that if the minimum wage in Pennsylvania is raised to $9.00 per hour in 2017, total job losses may range from

7,650 to 15,300, out of which 2,780 to 5,559 will be in rural areas, and 4,870 to 9,741 will be in urban areas.

Under the $10.10 option, the expected job losses in 2017 may range from 28,667 to 57,334, out of which

10,396 to 20,792 will be in rural areas, and 18,271 to 36,542 will be in urban areas. The estimated number of

absolute job losses will be greater in urban areas than rural because most workers are employed in urban areas;

however, there is no significant difference in the percentage of job losses between rural and urban areas.


An increase in the minimum wage will cause an increase in income for all affected workers, both directly and

indirectly. Income gains associated with an increase in the minimum wage for both the $9.00 and $10.10 options

were determined by assuming that each worker will continue to work the same number of weeks and hours at the

higher minimum wage in 2017.

Under the $9.00 option, all workers earning $9.00 or less per hour will directly benefit and those earning $9.01

to $9.88 per hour will indirectly benefit when the minimum wage is increased to $9.00 per hour. For all these

workers, income would increase approximately $778 million, with 37 percent of the increase going to rural

workers and 63 percent going to urban workers. This increase represents 0.3 percent of the wage and salary

income reported by the U.S. Bureau of Economic Analysis for 2014.

Under the $10.10 option, workers earning $10.10 or less per hour will directly benefit and those earning $10.11

to $11.53 per hour will indirectly benefit when the minimum wage is increased to $10.10 per hour. For these

workers, income would increase approximately $2.25 billion, or 0.8 percent of Pennsylvania wage and salary

income in 2014, with 37 percent going to rural workers and 63 percent going to urban workers.

However, income losses would also occur when workers lose their jobs as the minimum wage increases. Based

on the above estimates, the income losses may range between $27 million and $54 million under the $9.00 option,

and between $104 million and $207 million under the $10.10 option based on the range of employment elasticity

estimates.

Therefore, the estimated net gain in income under the $9.00 option ranges between $724 million to $751

million (±4.3 percent). Under the $10.10 option, the net gain is estimated to range between $2.05 billion to $2.15

billion (±3.6 percent).

Minimum wage increases not only increase individual incomes but also household incomes. To calculate the

number of Pennsylvania households impacted, the researchers merged the population data with income gains due

to minimum wage increases and the household data. Based on these estimates, 629,903 Pennsylvania households

(230,847 rural and 399,056 urban) will be impacted under the $9.00 option. Under the $10.10 option, 880,396

Pennsylvania households (322,748 rural and 557,648 urban) will be impacted. Most of these households will see

an increase in income, but some will lose jobs.

Because of income gains, a significant number of Pennsylvania households will be moved out of poverty due to

minimum wage increases. Based on the study estimates, 2,634 rural households and 7,269 urban households, or a

total of 9,903 Pennsylvania households, will be lifted out of poverty under the $9.00 option. Under the $10.10

option, 7,547 rural households and 21,347 urban households, or a total of 28,894 Pennsylvania households, will

be lifted out of poverty.

Finally, the researchers converted the CBO estimate of $8,800 for the average federal support per household in

the lowest income quintile during 2012 using the CPI inflation rates to arrive at an estimate of $9,075 for 2014 for

the average federal support per household in the form of healthcare, cash assistance, tax credit programs, etc.

Applying the $9,075 estimate to the number of households lifted out of poverty reported above suggests that the


federal government will save close to $90 million if the minimum wage is increased to $9.00 and $262 million if

it is increased to $10.10. However, it is worth pointing out that these estimates do not include any potential

increases in tax revenues paid by the workers earning higher incomes due to minimum wage increases.

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Statistical Appendix Pennsylvania’s 2012 PUMAs

Source: The Center for Rural Pennsylvania.


Pennsylvania’s Rural & Urban PUMAs

Id2 PUMA_2012

Geography2012

Estimated Population

# Square Land

Miles, 2010

Density Rural = 2; Urban=1

4200101 101 1 Erie City, Lawrence Park Township & Wesleyville Borough PUMA; Pennsylvania 108,815 21.5 5,061.2 14200701 701 2 Lackawanna County--Scranton City, Dunmore, Old Forge, Taylor & Moosic Boroughs PUMA; Pennsylvania 112,199 49.3 2,274.9 14200801 801 3 Luzerne County (East)--Kingston Borough PUMA, Pennsylvania 126,849 316.4 401.0 14200802 802 4 Luzerne County (South Central)--Wilkes-Barre & Hazleton Cities PUMA, Pennsylvania 126,995 200.0 634.9 14201502 1502 5 Beaver County (South) PUMA, Pennsylvania 153,627 344.9 445.5 14201701 1701 6 Pittsburgh City (North) PUMA, Pennsylvania 194,671 30.1 6,469.3 14201702 1702 7 Pittsburgh City (South) PUMA, Pennsylvania 115,390 25.6 4,504.7 14201801 1801 8 Allegheny County (West) PUMA, Pennsylvania 108,839 126.5 860.3 14201802 1802 9 Allegheny County (North)--Franklin Park Borough & Allison Park PUMA, Pennsylvania 153,574 203.9 753.0 14201803 1803 10 Allegheny County (North Central) PUMA, Pennsylvania 122,291 61.3 1,994.5 14201804 1804 11 Allegheny County (East)--Monroeville Municipality, Plum & Wilkinsburg Boroughs PUMA; Pennsylvania 181,225 86.4 2,097.3 14201805 1805 12 Allegheny County (Southeast)--West Mifflin Borough, McKeesport City & Munhall Borough PUMA; Pennsylvania 110,964 93.8 1,182.5 14201806 1806 13 Allegheny County (South Central)--Baldwin & Whitehall Boroughs PUMA, Pennsylvania 131,769 27.4 4,811.4 14201807 1807 14 Allegheny County (South)--Bethel Park Municipality & Jefferson Hills Borough PUMA, Pennsylvania 110,615 75.0 1,475.5 14202001 2001 15 Westmoreland County (Northwest)--Murrysville Municipality & New Kensington City PUMA, Pennsylvania 103,196 167.5 616.0 14202002 2002 16 Westmoreland County (Southwest)--Greensburg City PUMA, Pennsylvania 153,160 230.8 663.7 14202302 2302 17 Cumberland County (East) PUMA, Pennsylvania 145,554 144.1 1,010.4 14202401 2401 18 Dauphin County (Central)--Harrisburg City & Colonial Park PUMA, Pennsylvania 159,345 66.2 2,408.6 14202500 2500 19 Lebanon County PUMA, Pennsylvania 135,251 361.8 373.8 14202701 2701 20 Berks County (Northwest)--Wyomissing Borough PUMA, Pennsylvania 126,749 312.8 405.2 14202702 2702 21 Berks County (Southwest)--Reading City PUMA, Pennsylvania 138,420 104.8 1,320.9 14202703 2703 22 Berks County (East) PUMA, Pennsylvania 148,322 438.9 338.0 14202802 2802 23 Lehigh County (South--Outside Allentown & Bethlehem Cities)--Emmaus Borough PUMA, Pennsylvania 151,662 137.6 1,101.9 14202803 2803 24 Allentown City PUMA, Pennsylvania 118,974 17.5 6,779.9 14202901 2901 25 Northampton (South) & Lehigh (East) Counties--Bethlehem (East) & Easton Cities PUMA, Pennsylvania 170,695 90.6 1,883.2 14202902 2902 26 Northampton County (North) PUMA, Pennsylvania 148,711 283.3 524.9 14203001 3001 27 Bucks County (North) PUMA, Pennsylvania 134,937 307.0 439.5 14203002 3002 28 Bucks County (Central) PUMA, Pennsylvania 137,719 144.3 954.1 14203003 3003 29 Bucks County (Southeast)--Levittown PUMA, Pennsylvania 176,520 79.3 2,225.1 14203004 3004 30 Bucks County (Southwest) PUMA, Pennsylvania 177,877 73.6 2,416.7 14203101 3101 31 Montgomery County (Northwest)--Pottstown Borough PUMA, Pennsylvania 131,645 125.1 1,052.3 14203102 3102 32 Montgomery County (Northeast)--Lansdale Borough PUMA, Pennsylvania 116,972 106.8 1,095.5 14203103 3103 33 Montgomery County (Southwest)--King of Prussia & Ardmore (East) PUMA, Pennsylvania 133,574 61.9 2,157.3 14203104 3104 34 Montgomery County (Central)--Norristown Borough PUMA, Pennsylvania 123,165 63.7 1,932.6 14203105 3105 35 Montgomery County (Southeast)--Willow Grove, Horsham & Montgomeryville PUMA; Pennsylvania 132,142 64.6 2,046.4 14203106 3106 36 Montgomery County (South Central) PUMA, Pennsylvania 170,962 60.9 2,805.5 14203201 3201 37 Philadelphia City (Far Northeast) PUMA, Pennsylvania 146,353 26.3 5,567.7 14203202 3202 38 Philadelphia City (Near Northeast-West) PUMA, Pennsylvania 135,839 9.1 14,878.2 14203203 3203 39 Philadelphia City (Near Northeast-East) PUMA, Pennsylvania 131,278 9.8 13,414.6 14203204 3204 40 Philadelphia City (North) PUMA, Pennsylvania 179,833 8.8 20,430.3 14203205 3205 41 Philadelphia City (East) PUMA, Pennsylvania 164,907 10.6 15,553.9 14203206 3206 42 Philadelphia City (Northwest) PUMA, Pennsylvania 131,964 19.2 6,885.5 14203207 3207 43 Philadelphia City (Central) PUMA, Pennsylvania 121,340 6.8 17,810.5 14203208 3208 44 Philadelphia City (West) PUMA, Pennsylvania 123,820 11.4 10,901.0 14203209 3209 45 Philadelphia City (Center City) PUMA, Pennsylvania 132,834 5.9 22,501.2 14203210 3210 46 Philadelphia City (Southwest) PUMA, Pennsylvania 145,292 16.3 8,923.6 14203211 3211 47 Philadelphia City (Southeast) PUMA, Pennsylvania 134,147 10.0 13,443.0 14203301 3301 48 Delaware County (North)--Broomall & Ardmore (West) PUMA, Pennsylvania 130,790 50.3 2,600.0 14203302 3302 49 Delaware County (East)--Yeadon, Darby, Lansdowne Boroughs & Drexel Hill PUMA; Pennsylvania 167,711 21.0 7,974.9 14203303 3303 50 Delaware County (Southeast)--Chester City PUMA, Pennsylvania 143,846 29.4 4,886.6 14203304 3304 51 Delaware County (West) PUMA, Pennsylvania 118,751 83.1 1,429.5 14203401 3401 52 Chester County (North)--Phoenixville Borough PUMA, Pennsylvania 107,638 147.0 732.4 14203402 3402 53 Chester County (East Central)--West Chester Borough PUMA, Pennsylvania 139,475 106.8 1,306.3 14203403 3403 54 Chester County (West Central)--Coatesville City PUMA, Pennsylvania 145,352 193.2 752.5 14203404 3404 55 Chester County (South) PUMA, Pennsylvania 114,110 303.6 375.8 14203501 3501 56 Lancaster County--Lancaster City, East Lampeter, Lancaster & West Lampeter Townships PUMA; Pennsylvania 122,567 52.6 2,329.0 14203502 3502 57 Lancaster County (Northwest)--Elizabethtown Borough PUMA, Pennsylvania 107,020 212.1 504.6 14203503 3503 58 Lancaster County (East)--Ephrata Borough PUMA, Pennsylvania 172,703 517.4 333.8 14203504 3504 59 Lancaster County (Southwest)--Columbia Borough PUMA, Pennsylvania 124,533 161.7 770.0 14203601 3601 60 York County (Central)--York City & Shiloh PUMA, Pennsylvania 165,740 92.6 1,788.9 14203602 3602 61 York County (North)--Weigelstown PUMA, Pennsylvania 122,827 336.1 365.5 14203603 3603 62 York County (South) PUMA, Pennsylvania 149,279 475.4 314.0 1

Total 8,573,324 8,022Average Population Density Urban PUMAs 1,069


Source: The Center for Rural Pennsylvania.

Id2 PUMA_2012

Geography2012

Estimated Population

# Square Land

Miles, 2010

Density Rural = 2; Urban=1

4200102 102 1 Erie County (Outer) PUMA, Pennsylvania 171,831 777.7 220.9 24200200 200 2 Crawford & Warren Counties PUMA, Pennsylvania 128,744 1,896.4 67.9 24200300 300 3 Clearfield, McKean, Elk, Potter & Cameron Counties PUMA; Pennsylvania 179,476 4,428.8 40.5 24200400 400 4 Bradford, T ioga & Sullivan Counties PUMA; Pennsylvania 111,680 2,731.1 40.9 24200500 500 5 Pike, Wayne & Susquehanna Counties PUMA; Pennsylvania 151,550 2,094.1 72.4 24200600 600 6 Monroe County PUMA, Pennsylvania 168,798 608.3 277.5 24200702 702 7 Lackawanna (Outside Greater Scranton City) & Wyoming Counties PUMA, Pennsylvania 130,403 807.1 161.6 24200803 803 8 Columbia & Luzerne (West) Counties--Bloomsburg Town & Berwick Borough PUMA, Pennsylvania 134,070 857.1 156.4 24200900 900 9 Lycoming & Clinton Counties PUMA, Pennsylvania 156,685 2,116.6 74.0 24201000 1000 10 Northumberland & Montour Counties PUMA, Pennsylvania 112,784 588.6 191.6 24201100 1100 11 Mifflin, Union, Snyder & Juniata Counties PUMA; Pennsylvania 156,301 1,447.1 108.0 24201200 1200 12 Centre County PUMA, Pennsylvania 155,171 1,109.9 139.8 24201300 1300 13 Venango, Jefferson, Clarion & Forest Counties PUMA; Pennsylvania 145,400 2,354.8 61.7 24201400 1400 14 Mercer County PUMA, Pennsylvania 115,655 672.6 172.0 24201501 1501 15 Lawrence & Beaver (North) Counties--New Castle City PUMA, Pennsylvania 106,489 448.0 237.7 24201600 1600 16 Butler County PUMA, Pennsylvania 184,970 788.6 234.6 24201900 1900 17 Indiana & Armstrong Counties PUMA, Pennsylvania 156,627 1,480.2 105.8 24202003 2003 18 Westmoreland County (East) PUMA, Pennsylvania 107,039 629.2 170.1 24202100 2100 19 Cambria County PUMA, Pennsylvania 141,584 688.4 205.7 24202200 2200 20 Blair & Huntingdon Counties--Altoona City PUMA, Pennsylvania 173,064 1,400.5 123.6 24202301 2301 21 Cumberland (West) & Perry Counties--Carlisle Borough PUMA, Pennsylvania 138,761 952.8 145.6 24202402 2402 22 Dauphin County (Outer)--Hershey PUMA, Pennsylvania 110,320 458.9 240.4 24202600 2600 23 Schuylkill County PUMA, Pennsylvania 147,063 778.6 188.9 24202801 2801 24 Carbon & Lehigh (North) Counties PUMA, Pennsylvania 129,476 567.1 228.3 24203701 3701 25 Adams & Franklin (Southeast) Counties PUMA, Pennsylvania 125,870 561.1 224.3 24203702 3702 26 Franklin County (Outside Washington Township & Waynesboro Borough) PUMA, Pennsylvania 126,887 729.8 173.9 24203800 3800 27 Somerset, Bedford & Fulton Counties PUMA; Pennsylvania 141,053 2,524.2 55.9 24203900 3900 28 Fayette County PUMA, Pennsylvania 135,660 790.3 171.6 24204001 4001 29 Washington County (North)--Washington City PUMA, Pennsylvania 142,520 517.4 275.4 24204002 4002 30 Washington (South) & Greene Counties PUMA, Pennsylvania 104,281 915.5 113.9 2

Total 4,190,212 36,721Average Population Density Rural PUMAs 114


Socio-Demographic Characteristics of Workers Earning Minimum Wage or Less in U.S. and Pennsylvania

Source: Analysis of the Pennsylvania Minimum Wage in 2014,

Pennsylvania Department of Labor & Industry, Center for Workforce Information Analysis.

CWIA CWIAUS PA

Total 3,012,000 157,500

Gender Male 26% 37% Female 74% 63%

Race Black, non-Hispanic 7% 14% Hispanic 4% 17% Other, non-Hispanic 10% 7% White, non-Hispanic 79% 61%

Age 16-19 30% 21% 20-24 23% 27% 25-34 17% 22% 35-44 11% 11% 45-54 7% 9% 55-64 8% 7% 65 and over 4% 3%

Education Less than a high school diploma 20% 23% High school graduate, no college 41% 31% Some college, no degree 29% 30% Associate degree 2% 7% Bachelor's degree or higher 8% 9%

Marital Status Married Spouse Present 18% 22% Marital Status Other 11% 12% Never Married 72% 66%

Minimum Wage or Below*


Minimum Wage and Near-Minimum Wage PA Workers by Age


Note: ** indicates that the rural-urban differences are statistically significant at 5% level.

AGE RURAL URBAN AGE RURAL URBAN AGE RURAL URBAN AGE RURAL URBAN16-19 33336 49075 16-19 11958 17892 16-19 15756 32421 16-19 4762 695620-24 47143 77664 20-24 24029 42374 20-24 42050 73315 20-24 13806 3045625-34 26655 61773 25-34 23730 47649 25-34 42175 86106 25-34 21552 3924635-44 14120 27592 35-44 15418 28166 35-44 25627 53269 35-44 17449 2514645-54 16556 29580 45-54 22121 27611 45-54 33819 57340 45-54 19632 2737355-64 15141 21333 55-64 13694 22949 55-64 28706 39914 55-64 17275 2191765 and Over 9034 12645 65 and Over 7858 15192 65 and Over 13539 26320 65 and Over 6846 11015

Total 161985 279662 118808 201833 201672 368685 101322 162109Percentage 37% 63% 37% 63% 35% 65% 38% 62%GRAND TOTAL 441647 320641 570357 263431

AGE RURAL URBAN AGE RURAL URBAN AGE RURAL URBAN AGE RURAL URBAN16-19 ** 21% 18% 16-19 10% 9% 16-19 8% 9% 16-19 5% 4%20-24 29% 28% 20-24 20% 21% 20-24 21% 20% 20-24 ** 14% 19%25-34 16% 22% 25-34 ** 20% 24% 25-34 21% 23% 25-34 21% 24%35-44 9% 10% 35-44 13% 14% 35-44 13% 14% 35-44 17% 16%45-54 10% 11% 45-54 ** 19% 14% 45-54 17% 16% 45-54 19% 17%55-64 9% 8% 55-64 12% 11% 55-64 ** 14% 11% 55-64 ** 17% 14%65 and Over 6% 5% 65 and Over 7% 8% 65 and Over 7% 7% 65 and Over 7% 7%

Total 100% 100% 100% 100% 100% 100% 100% 100%

Hourly Wage $2.83 to $7.25 Hourly Wage $7.26 to $9.00 Hourly Wage $7.26 to $10.10 Hourly Wage $10.11 to $11.50



Minimum Wage and Near-Minimum Wage PA Workers by Race

Source: 2014 ACS 1-year Public Use Microdata Samples (PUMS). Note: ** indicates that the rural-urban differences are statistically significant at 5% level.

RACE RURAL URBAN RACE RURAL URBAN RACE RURAL URBAN RACE RURAL URBANWhite 151925 202964 White 110293 144079 White 190029 267636 White 97341 121323Non-White 10060 76698 Non-White 8515 57754 Non-White 11643 101049 Non-White 3981 40786

Total 161985 279662 118808 201833 201672 368685 101322 162109Percentage 37% 63% 37% 63% 35% 65% 38% 62%GRAND TOTAL 441647 320641 570357 263431

RACE RURAL URBAN RACE RURAL URBAN RACE RURAL URBAN RACE RURAL URBANWhite ** 94% 73% White ** 93% 71% White ** 94% 73% White ** 96% 75%Non-White ** 6% 27% Non-White ** 7% 29% Non-White ** 6% 27% Non-White ** 4% 25%

Total 100% 100% 100% 100% 100% 100% 100% 100%




Minimum Wage and Near-Minimum Wage PA Workers by Gender


PennsylvaniaTotal % Total % Total %

Male 187600 42.5% 67853 41.9% 119747 42.8%Female 253912 57.5% 94020 58.1% 159892 57.2%Total 441512 100.0% 161873 100.0% 279639 100.0%

Total % Total % %Men 134924 42.1% 48387 40.7% 86537 42.9%Women 185717 57.9% 70421 59.3% 115296 57.1%Total 320641 100.0% 118808 100.0% 201833 100.0%

PennsylvaniaTotal % Total % %

Male ** 250130 43.9% 81275 40.3% 168855 45.8%Female ** 320227 56.1% 120397 59.7% 199830 54.2%Total 570357 100.0% 201672 100.0% 368685 100.0%

Total % Total % Total %Male ** 116258 44.1% 41574 41.0% 74684 46.1%Female ** 147173 55.9% 59748 59.0% 87425 53.9%Total 263431 100.0% 101322 100.0% 162109 100.0%


Hourly Wage $10.11 to $11.50Pennsylvania Rural Urban

Rural

Rural

Rural

Urban

Urban

Urban

Hourly Wage $7.26 to $9.00Pennsylvania



Source: 2014 ACS 1-year Public Use Microdata Samples (PUMS)

Note: Gender differences between urban and rural PA are not statistically different at 5% level.

Source: 2014 ACS 1-year Public Use Microdata Samples (PUMS)

Note: Gender differences between urban and rural PA are not statistically different at 5% level.


Minimum Wage and Near-Minimum Wage PA Workers by Marital Status



Total % Total % Total %Married 109672 24.8% 40694 25.1% 68978 24.7%Widowed 6216 1.4% 2584 1.6% 3632 1.3%Divorced** 30438 6.9% 13957 8.6% 16481 5.9%Separated** 10048 2.3% 2437 1.5% 7611 2.7%Never married or under 15 years old 285273 64.6% 102313 63.2% 182960.0 65.4%Total 441647 100.0% 161985 100.0% 279662 100.0%

Total % Total % Total %Married 100932 31.5% 37478 31.5% 63454 31.4%Widowed 8305 2.6% 3368 2.8% 4937 2.4%Divorced** 26902 8.4% 12845 10.8% 14057 7.0%Separated 8215 2.6% 3264 2.7% 4951 2.5%Never married or under 15 years old** 176287 55.0% 61853 52.1% 114434.0 56.7%Total 320641 100.0% 118808 100.0% 201833 100.0%

Total % Total % Total %Married** 189493 33.2% 70525 35.0% 118968 32.3%Widowed 14720 2.6% 5425 2.7% 9295 2.5%Divorced** 47595 8.3% 22572 11.2% 25023 6.8%Separated 14845 2.6% 4841 2.4% 10004 2.7%Never married or under 15 years old** 303704 53.2% 98309 48.7% 205395 55.7%Total 570357 100.0% 201672 100.0% 368685 100.0%

Total % Total % Total %Married** 101731 38.6% 43546 43.0% 58185 35.9%Widowed 5492 2.1% 2274 2.2% 3218 2.0%Divorced** 25867 9.8% 12586 12.4% 13281 8.2%Separated 5800 2.2% 2561 2.5% 3239 2.0%Never married or under 15** 124541 47.3% 40355 39.8% 84186 51.9%Total 263431 100.0% 101322 100.0% 162109 100.0%


Pennsylvania Rural Urban

Pennsylvania Rural Urban





Minimum Wage and Near-Minimum Wage PA Workers by Educational Attainment



SCHOOLING RURAL URBAN SCHOOLING RURAL URBANLess than a High School Diplomo 24300 45528 Less than a High School Diplomo 12164 33065High School Graduates or Equivalent, No College 66578 93934 High School Graduates or Equivalent, No College 57462 80638Some College, No Degree 48700 81118 Some College, No Degree 25541 45053Associate Degree 8147 19559 Associate Degree 11355 14210Bachelor's Degree or Higher 14260 39523 Bachelor's Degree or Higher 12286 28867

Total 161985 279662 118808 201833Percentage 37% 63% 37% 63%GRAND TOTAL 441647 320641

SCHOOLING RURAL URBAN SCHOOLING RURAL URBANLess than a High School Diplomo 15% 16% Less than a High School Diplomo** 10% 16%High School Graduates or Equivalent, No College ** 41% 34% High School Graduates or Equivalent, No College** 48% 40%Some College, No Degree 30% 29% Some College, No Degree 21% 22%Associate Degree 5% 7% Associate Degree** 10% 7%Bachelor's Degree or Higher ** 9% 14% Bachelor's Degree or Higher** 10% 14%

100% 100% 100% 100%

Hourly Wage $2.83 to $7.25 Hourly Wage $7.26 to $9.00


SCHOOLING RURAL URBAN SCHOOLING RURAL URBANLess than a High School Diplomo 19186 53646 Less than a High School Diplomo 8543 21013High School Graduates or Equivalent, No College 95513 147417 High School Graduates or Equivalent, No College 48208 62301Some College, No Degree 43791 84907 Some College, No Degree 24922 35684Associate Degree 18749 25729 Associate Degree 8112 14681Bachelor's Degree or Higher 24433 56986 Bachelor's Degree or Higher 11537 28430

201672 368685 101322 16210935% 65% 38% 62%

570357 263431

SCHOOLING RURAL URBAN SCHOOLING RURAL URBANLess than a High School Diplomo** 10% 15% Less than a High School Diplomo** 8% 13%High School Graduates or Equivalent, No College** 47% 40% High School Graduates or Equivalent, No College** 48% 38%Some College, No Degree 22% 23% Some College, No Degree 25% 22%Associate Degree** 9% 7% Associate Degree 8% 9%Bachelor's Degree or Higher** 12% 15% Bachelor's Degree or Higher** 11% 18%

100% 100% 100% 100%




Minimum Wage and Near-Minimum Wage PA Workers by English Speaking Ability



Ability to Speak English RURAL URBAN Ability to Speak English RURAL URBANSpeaks Only English 154023 230751 Speaks Only English 112542 161075Very Well 5974 28641 Very Well 5078 19737Well 1110 8269 Well 544 8178Not Well 878 7679 Not Well 432 9819Not at all 0 4322 Not at all 212 3024


Ability to Speak English RURAL URBAN Ability to Speak English RURAL URBANSpeaks Only English ** 95.1% 82.5% Speaks Only English** 94.7% 79.8%Well / Very Well ** 4.4% 13.2% Well / Very Well** 4.7% 13.8%Not Well / Not at All ** 0.5% 4.3% Not Well / Not at All** 0.5% 6.4%

100% 100% 100% 100%



Ability to Speak English RURAL URBAN Ability to Speak English RURAL URBANSpeaks Only English 193070 299063 Speaks Only English 97669 133506Very Well 6683 34248 Very Well 2541 12760Well 834 15148 Well 705 8299Not Well 857 15232 Not Well 399 5372Not at all 228 4994 Not at all 8 2172

201672 368685 101322 16210935% 65% 38% 62%

570357 263431

Ability to Speak English RURAL URBAN Ability to Speak English RURAL URBANSpeaks Only English** 95.7% 81.1% Speaks Only English** 96.4% 82.4%Well / Very Well** 3.7% 13.4% Well / Very Well** 3.2% 13.0%Not Well / Not at All** 0.5% 5.5% Not Well / Not at All** 0.4% 4.7%

100% 100% 100% 100%




Minimum Wage Pennsylvania Workers by Industry





INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 1% 2%21 Mining, Quarrying, and Oil and Gas Extraction 0% 0%22 Utilities 0% 0%23 Construction 3% 3%31-33 Manufacturing 6% 7%42 Wholesale Trade 1% 2%44-45 Retail Trade 22% 22%48-49 Transportation and Warehousing 3% 3%51 Information 1% 1%52 Finance and Insurance 1% 1%53 Real Estate and Rental and Leasing 1% 1%54 Professional, Scientific and Technical Services 1% 3%55 Management of Companies and Enterprises 0% 0%56 Administrative and Support and Waste Management and Remediation Services ** 4% 6%61 Educational Services 5% 5%62 Health Care and Social Assistance ** 14% 12%71 Arts, Entertainment, and Recreation 5% 4%72 Accommodation and Food Services ** 27% 23%81 Other Services, except Public Administration 6% 5%

100% 100%






Near-Minimum Wage PA Workers by Industry





INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 1% 1%21 Mining, Quarrying, and Oil and Gas Extraction 1% 0%22 Utilities 1% 0%23 Construction 4% 3%31-33 Manufacturing 8% 8%42 Wholesale Trade 2% 3%44-45 Retail Trade 24% 24%48-49 Transportation and Warehousing 3% 3%51 Information 1% 2%52 Finance and Insurance 2% 2%53 Real Estate and Rental and Leasing 0% 1%54 Professional, Scientific and Technical Services 1% 1%55 Management of Companies and Enterprises 0% 0%56 Administrative and Support and Waste Management and Remediation Services** 4% 6%61 Educational Services 6% 5%62 Health Care and Social Assistance** 17% 14%71 Arts, Entertainment, and Recreation 2% 3%72 Accommodation and Food Services 17% 18%81 Other Services, except Public Administration 6% 6%

100% 100%











INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 1% 1%21 Mining, Quarrying, and Oil and Gas Extraction 1% 0%22 Utilities 0% 0%23 Construction 3% 3%31-33 Manufacturing 10% 9%42 Wholesale Trade 2% 3%44-45 Retail Trade 23% 22%48-49 Transportation and Warehousing 3% 4%51 Information 1% 2%52 Finance and Insurance 2% 2%53 Real Estate and Rental and Leasing 1% 1%54 Professional, Scientific and Technical Services 1% 2%55 Management of Companies and Enterprises 0% 0%56 Administrative and Support and Waste Management and Remediation Services** 4% 7%61 Educational Services 5% 4%62 Health Care and Social Assistance** 18% 15%71 Arts, Entertainment, and Recreation 3% 3%72 Accommodation and Food Services 16% 17%81 Other Services, except Public Administration 6% 6%

100% 100%











INDUSTRY RURAL URBAN11 Agriculture, Forestry, Fishing and Hunting 2% 1%21 Mining, Quarrying, and Oil and Gas Extraction 1% 0%22 Utilities 0% 0%23 Construction 4% 4%31-33 Manufacturing 11% 9%42 Wholesale Trade 2% 3%44-45 Retail Trade 18% 20%48-49 Transportation and Warehousing 4% 5%51 Information 1% 1%52 Finance and Insurance 3% 4%53 Real Estate and Rental and Leasing 1% 1%54 Professional, Scientific and Technical Services 1% 2%55 Management of Companies and Enterprises 0% 0%56 Administrative and Support and Waste Management and Remediation Services 5% 5%61 Educational Services 5% 5%62 Health Care and Social Assistance 20% 18%71 Arts, Entertainment, and Recreation 2% 2%72 Accommodation and Food Services 12% 12%81 Other Services, except Public Administration** 8% 5%

100% 100%





Minimum Wage Pennsylvania Workers by Occupation





Occupation RURAL URBAN11 Management Occupations 1% 2%13 Business and Financial Operations Occupations 1% 2%15 Computer and Mathematical Occupations 0% 1%17 Architecture and Engineering Occupations 0% 0%19 Life, Physical, and Social Science Occupations 0% 0%21 Community and Social Services Occupations 2% 1%23 Legal Occupations 0% 0%25 Education, Training, and Library Occupations 3% 4%27 Arts, Design, Entertainment, Sports, and Media Occupations 1% 1%29 Healthcare Practitioners and Technical Occupations 2% 2%31 Healthcare Support Occupations 3% 4%33 Protective Service Occupations 2% 1%35 Food Preparation and Serving Related Occupations ** 24% 20%37 Building and Grounds Cleaning and Maintenance Occupations 6% 6%39 Personal Care and Service Occupations 7% 6%41 Sales and Related Occupations 17% 18%43 Office and Administrative Support Occupations 12% 12%45 Farming, Fishing, and Forestry Occupations 1% 1%47 Construction and Extraction Occupations 2% 2%49 Installation, Maintenance, and Repair Occupations 1% 1%51 Production Occupations ** 4% 6%53 Transportation and Material Moving Occupations 10% 10%

100% 100%






Near-Minimum Wage PA Workers by Occupation





Occupation RURAL URBAN11 Management Occupations 2% 3%13 Business and Financial Operations Occupations 1% 1%15 Computer and Mathematical Occupations 0% 0%17 Architecture and Engineering Occupations 0% 0%19 Life, Physical, and Social Science Occupations 0% 0%21 Community and Social Services Occupations** 3% 1%23 Legal Occupations 0% 0%25 Education, Training, and Library Occupations 4% 4%27 Arts, Design, Entertainment, Sports, and Media Occupations 1% 1%29 Healthcare Practitioners and Technical Occupations 2% 3%31 Healthcare Support Occupations 5% 4%33 Protective Service Occupations 1% 2%35 Food Preparation and Serving Related Occupations 15% 15%37 Building and Grounds Cleaning and Maintenance Occupations 7% 7%39 Personal Care and Service Occupations 6% 7%41 Sales and Related Occupations 15% 17%43 Office and Administrative Support Occupations 16% 14%45 Farming, Fishing, and Forestry Occupations 1% 1%47 Construction and Extraction Occupations 2% 2%49 Installation, Maintenance, and Repair Occupations 1% 2%51 Production Occupations 7% 8%53 Transportation and Material Moving Occupations 10% 10%

100% 100%











Occupation RURAL URBAN11 Management Occupations 3% 3%13 Business and Financial Operations Occupations 1% 1%15 Computer and Mathematical Occupations 0% 1%17 Architecture and Engineering Occupations 0% 0%19 Life, Physical, and Social Science Occupations 0% 0%21 Community and Social Services Occupations 2% 1%23 Legal Occupations 0% 0%25 Education, Training, and Library Occupations 3% 3%27 Arts, Design, Entertainment, Sports, and Media Occupations 1% 1%29 Healthcare Practitioners and Technical Occupations 2% 3%31 Healthcare Support Occupations 5% 4%33 Protective Service Occupations 1% 2%35 Food Preparation and Serving Related Occupations 14% 15%37 Building and Grounds Cleaning and Maintenance Occupations 7% 7%39 Personal Care and Service Occupations 7% 6%41 Sales and Related Occupations 15% 14%43 Office and Administrative Support Occupations 16% 15%45 Farming, Fishing, and Forestry Occupations 1% 1%47 Construction and Extraction Occupations 2% 2%49 Installation, Maintenance, and Repair Occupations 2% 2%51 Production Occupations 7% 7%53 Transportation and Material Moving Occupations 10% 10%

100% 100%











Occupation RURAL URBAN11 Management Occupations 3% 3%13 Business and Financial Operations Occupations 2% 1%15 Computer and Mathematical Occupations 0% 1%17 Architecture and Engineering Occupations 0% 0%19 Life, Physical, and Social Science Occupations 0% 1%21 Community and Social Services Occupations 2% 1%23 Legal Occupations 0% 0%25 Education, Training, and Library Occupations** 2% 4%27 Arts, Design, Entertainment, Sports, and Media Occupations 1% 1%29 Healthcare Practitioners and Technical Occupations 4% 3%31 Healthcare Support Occupations 5% 5%33 Protective Service Occupations 1% 1%35 Food Preparation and Serving Related Occupations 11% 13%37 Building and Grounds Cleaning and Maintenance Occupations 5% 6%39 Personal Care and Service Occupations 7% 7%41 Sales and Related Occupations 10% 11%43 Office and Administrative Support Occupations 19% 21%45 Farming, Fishing, and Forestry Occupations 2% 1%47 Construction and Extraction Occupations 4% 4%49 Installation, Maintenance, and Repair Occupations 3% 3%51 Production Occupations 8% 7%53 Transportation and Material Moving Occupations 10% 9%

100% 100%






Minimum Wage and Near-Minimum Wage PA Workers by Disability Status





Disability Status RURAL URBAN Disability Status RURAL URBAN Disability Status RURAL URBAN Disability Status RURAL URBAN

With a Disability 10.2% 8.5% With a Disability 10.1% 8.0% With a Disability 9.3% 7.8% With a Disability 8.4% 8.8%

Hourly Wage $2.83 - $7.25 ** Hourly Wage $7.26 - $9.00 ** Hourly Wage $7.26 - $10.10 ** Hourly Wage $10.11 - $11.50


Minimum Wage and Near-Minimum Wage PA Workers Receiving Government Health Assistance





Govt. Health Assistance Received RURAL URBAN Govt. Health Assistance Received RURAL URBANReceive 22788 39387 Receive 13330 24907Do Not Receive 139197 240275 Do Not Receive 105478 176926

Total 161985 279662 118808 201833Percentage 37% 63% 37% 63%GRAND TOTAL 441647 GRAND TOTAL 320641

Govt. Health Assistance Received RURAL URBAN Govt. Health Assistance Received RURAL URBANReceive 14.1% 14.1% Receive 11.2% 12.3%Do Not Receive 85.9% 85.9% Do Not Receive 88.8% 87.7%

100% 100% 100% 100%


Govt. Health Assistance Received RURAL URBAN Govt. Health Assistance Received RURAL URBANReceive 21413 40936 Receive 8389 14146Do Not Receive 180259 327749 Do Not Receive 92933 147963

201672 368685 101322 16210935% 65% 38% 62%

GRAND TOTAL 570357 GRAND TOTAL 263431

Govt. Health Assistance Received RURAL URBAN Govt. Health Assistance Received RURAL URBANReceive 10.6% 11.1% Receive 8.3% 8.7%Do Not Receive 89.4% 88.9% Do Not Receive 91.7% 91.3%

100% 100% 100% 100%



Minimum Wage and Near-Minimum Wage PA Workers Receiving Public Assistance



Public Assistance Income past 12 months RURAL URBAN Public Assistance Income past 12 months RURAL URBAN$0 159667 272146 0 118035 196483$ 1 - $ 5,000 2230 7194 $ 1 - $ 5,000 662 3964$ 5,001 - $ 10,000 88 322 $ 5,001 - $ 10,000 111 985$ 10,001 - $ 15,000 0 0 $ 10,001 - $ 15,000 0 401


Public Assistance Income past 12 months RURAL URBAN Public Assistance Income past 12 months RURAL URBAN$0 98.6% 97.3% $0 99.3% 97.3%$ 1 - $ 5,000 1.4% 2.6% $ 1 - $ 5,000 0.6% 2.0%$ 5,001 - $ 10,000 0.1% 0.1% $ 5,001 - $ 10,000 0.1% 0.5%$ 10,001 - $ 15,000 0.0% 0.0% $ 10,001 - $ 15,000 0.0% 0.2%Average PAP for those Receiving Assistance ** $1,426 $1,549 Average PAP for those Receiving Assistance ** $1,925 $2,995% Receiving PAP ** 1.4% 2.7% % Receiving PAP ** 0.7% 2.7%Total Govt. Expenditure for PAP ($ Millions) ** $3.3 $11.6 Total Govt. Expenditure for PAP ($ Millions) ** $1.5 $16.0

100% 100% 100% 100%

Percentage of PA Workers Percentage of PA Workers

Hourly Wage $2.83 to $7.25 Hourly Wage $7.26 to $9.00Number of PA Workers Number of PA Workers

Public Assistance Income past 12 months RURAL URBAN Public Assistance Income past 12 months RURAL URBAN0 200202 360951 0 99677 158677$ 1 - $ 5,000 1221 5805 $ 1 - $ 5,000 1545 2999$ 5,001 - $ 10,000 111 1382 $ 5,001 - $ 10,000 100 433$ 10,001 - $ 15,000 138 547 $ 10,001 - $ 15,000 0 0

201672 368685 101322 162109

35% 65% 38% 62%570357 263431

Public Assistance Income past 12 months RURAL URBAN Public Assistance Income past 12 months RURAL URBAN0 99.3% 97.9% 0 98.4% 97.9%$ 1 - $ 5,000 0.6% 1.6% $ 1 - $ 5,000 1.5% 1.8%$ 5,001 - $ 10,000 0.1% 0.4% $ 5,001 - $ 10,000 0.1% 0.3%$ 10,001 - $ 15,000 0.1% 0.1% $ 10,001 - $ 15,000 0.0% 0.0%Average PAP for those Receiving Assistance ** $2,569 $2,943 Average PAP for those Receiving Assistance ** $1,647 $1,584% Receiving PAP ** 0.7% 2.1% % Receiving PAP 1.6% 2.1%Total Govt. Expenditure for PAP ($ Millions) ** $3.8 $22.8 Total Govt. Expenditure for PAP ($ Millions) ** $2.7 $5.4

100% 100% 100% 100%




Minimum Wage and Near-Minimum Wage PA Workers Receiving Supplementary Security Income


Supplementary Security Income past 12 months RURAL URBAN Supplementary Security Income past 12 months RURAL URBAN$0 98.2% 98.1% $0 99.1% 98.2%Average SSIP for those Receiving Assistance ** $6,711 $7,297 Average SSIP for those Receiving Assistance ** $7,647 $7,513Percentage Receiving SSIP 1.8% 1.9% Percentage Receiving SSIP ** 0.9% 1.8%Number of Workers 161,985 279,662 Number of Workers 118,808 201,833Total Government Expenditure for SSIP ($ Millions) $19.0 $37.8 Total Government Expenditure for SSIP ($ Millions) $8.5 $27.7

Hourly Wage $2.83 - $7.25 Hourly Wage $7.26 - $9.00Percentage of PA Workers Percentage of PA Workers

Supplementary Security Income past 12 months RURAL URBAN Supplementary Security Income past 12 months RURAL URBAN$0 99.1% 98.5% $0 98.8% 98.9%Average SSIP for those Receiving Assistance ** $8,725 $7,475 Average SSIP for those Receiving Assistance ** $8,522 $6,558Percentage Receiving SSIP ** 0.9% 1.5% Percentage Receiving SSIP 1.2% 1.1%Number of Workers 201,672 368,685 Number of Workers 101,322 162,109Total Government Expenditure for SSIP ($ Millions) $16.7 $41.7 Total Government Expenditure for SSIP ($ Millions) $10.4 $12.0

Hourly Wage $7.26 - $10.10 Hourly Wage $10.11 - $11.50Percentage of PA Workers Percentage of PA Workers


Most Common Means of Transportation to Work by

Minimum Wage and Near-Minimum Wage PA Workers



Means of Transportation to Work RURAL URBAN Means of Transportation to Work RURAL URBANCar/Truck/Van 112753 168393 Car/Truck/Van 97445 140234Bus/Trolley Bus 2368 21942 Bus/Trolley Bus 304 19282Walked 10220 23209 Walked 4880 9845Worked at Home 3122 4759 Worked at Home 2272 3764


Means of Transportation to Work RURAL URBAN Means of Transportation to Work RURAL URBANCar/Truck/Van ** 69.6% 60.2% Car/Truck/Van** 82.0% 69.5%Bus/Trolley Bus ** 1.5% 7.8% Bus/Trolley Bus** 0.3% 9.6%Walked ** 6.3% 8.3% Walked 4.1% 4.9%Worked at Home 1.9% 1.7% Worked at Home 1.9% 1.9%



Means of Transportation to Work RURAL URBAN Means of Transportation to Work RURAL URBANCar/Truck/Van 162424 255502 Car/Truck/Van 83250 119043Bus/Trolley Bus 664 32418 Bus/Trolley Bus 977 8233Walked 7610 19393 Walked 3272 7257Worked at Home 5970 8137 Worked at Home 1224 4024

201672 368685 101322 16210935% 65% 38% 62%

570357 263431

Means of Transportation to Work RURAL URBAN Means of Transportation to Work RURAL URBANCar/Truck/Van** 80.5% 69.3% Car/Truck/Van** 82.2% 73.4%Bus/Trolley Bus** 0.3% 8.8% Bus/Trolley Bus** 1.0% 5.1%Walked** 3.8% 5.3% Walked 3.2% 4.5%Worked at Home 3.0% 2.2% Worked at Home** 1.2% 2.5%




Travel Time to Work by Minimum Wage and Near-Minimum Wage PA Workers



Travel Time to Work RURAL URBAN Travel Time to Work RURAL URBANWork at Home 34962 58125 Work at Home 14975 253840 - 15 Minutes 75952 114236 0 - 15 Minutes 62233 8241616 - 30 Minutes 35296 67598 16 - 30 Minutes 30618 5856531 - 60 Minutes 12044 33421 31 - 60 Minutes 9071 28437Above 60 Minutes 3731 6282 Above 60 Minutes 1911 7031


Travel Time to Work RURAL URBAN Travel Time to Work RURAL URBANWork at Home 21.6% 20.8% Work at Home 12.6% 12.6%0 - 15 Minutes ** 46.9% 40.8% 0 - 15 Minutes** 52.4% 40.8%16 - 30 Minutes 21.8% 24.2% 16 - 30 Minutes** 25.8% 29.0%31 - 60 Minutes ** 7.4% 12.0% 31 - 60 Minutes** 7.6% 14.1%Above 60 Minutes 2.3% 2.2% Above 60 Minutes** 1.6% 3.5%

100% 100% 100% 100%



Travel Time to Work RURAL URBAN Travel Time to Work RURAL URBANWork at Home 28708 47848 Work at Home 13094 213880 - 15 Minutes 98029 151024 0 - 15 Minutes 49579 6639616 - 30 Minutes 53197 108832 16 - 30 Minutes 27587 4826131 - 60 Minutes 17765 50585 31 - 60 Minutes 9572 23292Above 60 Minutes 3973 10396 Above 60 Minutes 1490 2772

201672 368685 101322 16210935% 65% 38% 62%

570357 263431

Travel Time to Work RURAL URBAN Travel Time to Work RURAL URBANWork at Home 14.2% 13.0% Work at Home 12.9% 13.2%0 - 15 Minutes** 48.6% 41.0% 0 - 15 Minutes** 48.9% 41.0%16 - 30 Minutes** 26.4% 29.5% 16 - 30 Minutes 27.2% 29.8%31 - 60 Minutes** 8.8% 13.7% 31 - 60 Minutes** 9.4% 14.4%Above 60 Minutes 2.0% 2.8% Above 60 Minutes 1.5% 1.7%

100% 100% 100% 100%




Estimated Number of Workers Directly and Indirectly Affected by Minimum Wage Increase in 2017


Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $9.00 4. Wages for indirectly affected workers = $9.01 to $9.88. 5. ** Margin of error (95% confidence level) for the total number of workers affected: Rural = 3.2%; Urban = 2.4%; PA = 2.0%.


Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $10.10. 4. Wages for indirectly affected workers = $10.11 to $11.53 5. ** Margin of error (95% confidence level) for the total number of workers affected: Rural = 2.9%; Urban = 2.0%; PA = 1.7%.


Number of Households Affected by Minimum Wage Increase in 2017



Affected workers are those impacted by the minimum wage change; they include workers benefiting from the higher minimum wage as well as those who may lose their jobs.

Please note that due to the differences between population and household weights in the PUMS data, the total number of workers affected slightly differs depending on which weight is used.

The number of workers affected shown above is based on the population weights, which in researchers’ opinion is more appropriate when dealing with number of workers.

Rural Urban PennsylvaniaNumber of HH with 1 Affected Worker 201,389 353,687 555,076Number of HH with 2 Affected Workers 26,631 39,667 66,298Number of HH with 3 Affected Workers 2,081 4,790 6,871Number of HH with 4 Affected Workers 746 912 1,658Total Number of HH 230,847 399,056 629,903

Number of Households (HH) Affected by Minimum Wage Increase to $9/hr

Note: 830,791 workers earning $2.83 - $9.88 per hour will be affected

Rural Urban PennsylvaniaNumber of HH with 1 Affected Worker 272,693 481,045 753,738Number of HH with 2 Affected Workers 43,623 64,846 108,469Number of HH with 3 Affected Workers 5,258 10,294 15,552Number of HH with 4 Affected Workers 1,174 1,343 2,517Number of HH with 5 Affected Workers 0 120 120Total Number of HH 322,748 557,648 880,396

Number of Households (HH) Affected by Minimum Wage Increase to $10.10/hr

Note: 1,181,746 workers earning $2.83 - $11.53 per hour will be affected


Federal Poverty Guidelines

Source: Federal Register, Vol. 79, No. 14, Wednesday, Jan. 22, 2014, p.3593.

Persons in Family/Household Poverty Guideline

1 $11,670

2 $15,730

3 $19,790

4 $23,850

5 $27,910

6 $31,970

7 $36,030

8 $40,090 For families/households with more than 8 persons, add $4,060 for each additional person.


Change in the Number of Rural & Urban Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $9.00





- Before MW change


1 26,898 4,470 3,8732 67,291 8,369 7,0893 55,163 6,866 6,6004 45,028 6,957 6,7015 22,816 3,070 2,8356 8,819 1,633 1,6337 1,908 199 1998 1,003 256 2569 510 22 22

10 274 172 17211 713 524 52412 0 0 013 396 87 8720 28 0 0






1 46,814 12,894 11,5232 107,866 16,656 13,4713 96,765 13,865 12,5794 79,092 10,677 9,9885 39,002 5,945 5,5476 17,646 2,791 2,7917 5,518 1,515 1,4338 3,880 846 7649 1,057 392 392

10 196 46 4611 288 288 28812 425 274 9813 507 0 020 0 0 0



Change in the Number of Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $9.00


Number of Persons in

Pennsylvania HH

Total Number of Pennsylvania HH

Number of Pennsylvania HH below Poverty Level

- Before MW change

Number of Pennsylvania HH below Poverty Level - After MW change

1 73,712 17,364 15,3962 175,157 25,025 20,5603 151,928 20,731 19,1794 124,120 17,634 16,6895 61,818 9,015 8,3826 26,465 4,424 4,4247 7,426 1,714 1,6328 4,883 1,102 1,0209 1,567 414 414

10 470 218 21811 1,001 812 81212 425 274 9813 903 87 8720 28 0 0

Total Number of PA HH 629,903 98,814 88,911% of PA HH 15.7% 14.1%


Change in the Number of Rural & Urban Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $10.10





- Before MW change


1 40,659 6,023 4,3722 98,793 9,925 7,5013 75,726 7,927 6,9904 59,418 7,720 6,5055 30,654 3,685 2,6386 11,343 2,309 2,2307 2,267 249 2498 1,967 256 2569 510 22 0

10 274 172 011 713 524 52413 396 87 8720 28 0 0






1 68,066 15,138 9,1762 156,312 18,238 12,1713 136,718 16,367 10,9534 105,124 12,824 10,6195 51,599 7,615 6,6196 22,737 3,279 3,0847 8,291 1,862 1,6128 6,054 993 9119 1,103 392 392

10 294 46 4611 418 288 28812 425 274 9813 507 0 0



Change in the Number of Pennsylvania Households below Poverty Level Before and After Minimum Wage Increase of $10.10


Number of Persons in

Pennsylvania HH

Total Number of Pennsylvania HH

Number of Pennsylvania HH below Poverty Level

- Before MW change

Number of Pennsylvania HH below Poverty Level - After MW change

1 108,725 21,161 13,5482 255,105 28,163 19,6723 212,444 24,294 17,9434 164,542 20,544 17,1245 82,253 11,300 9,2576 34,080 5,588 5,3147 10,558 2,111 1,8618 8,021 1,249 1,1679 1,613 414 392

10 568 218 4611 1,131 812 81212 425 274 9813 903 87 8720 28 0 0

Total Number of PA HH 880,396 116,215 87,321% of PA HH 13.2% 9.9%


Estimated Job Losses in 2017 due to Minimum Wage Increase - $9.00 Option


Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $9.00 4. Wages for indirectly affected workers = $9.01 to $9.88. 5. ** Margin of error (95% confidence level) for the total estimated job losses: Rural = 3.2%; Urban = 2.4%; PA = 2.0%.

Elasticity -0.075 -0.15 Elasticity -0.025 -0.05 Elasticity Medium HighDirect 1.1% 2.2% Direct 1.0% 2.1% Direct 1.0% 2.1%Indirect 0.3% 0.5% Indirect 0.2% 0.5% Indirect 0.2% 0.5%Total 1.0% 2.0% Total 0.9% 1.8% Total 0.9% 1.8%



Estimated Job Losses in 2017 at Different Elasticities under the $9.00 Minimum Wage Option as a Percentage of

Workers Earning between $2.96 and $9.88Teenagers (16-19 years old) Adults (20 years and older) Total - All Workers

Rural Rural Rural

Urban

Pennsylvania Pennsylvania Pennsylvania

Urban Urban


Estimated Job Losses in 2017 due to Minimum Wage Increase - $10.10 Option


Notes: 1. Wages in 2014 were extrapolated to 2017 based on CPI inflation forecasts. 2. Employment levels in 2014 were extrapolated to 2017 based on estimated employment growth for all of Pennsylvania's workers made by the Pennsylvania Department of Labor and Industry's Center for Workforce Information and Analysis for 2014-2024. 3. Wages for directly affected workers = $2.96 to $10.10. 4. Wages for indirectly affected workers = $10.11 to $11.53 5. ** Margin of error (95% confidence level) for the total number of workers affected: Rural = 2.9%; Urban = 2.0%; PA = 1.7%.

Elasticity -0.1 -0.15 -0.2 Elasticity -0.033 -0.05 -0.067 Elasticity Low Medium HighDirect 1,734 2,602 3,469 Direct 8,182 12,273 16,364 Direct 9,917 14,875 19,833Indirect 22 32 43 Indirect 458 687 915 Indirect 479 719 959Total 1,756 2,634 3,512 Total 8,640 12,960 17,280 Total** 10,396 15,594 20,792

Elasticity -0.1 -0.15 -0.2 Elasticity -0.033 -0.05 -0.067 Elasticity Low Medium HighDirect 2,689 4,033 5,377 Direct 14,621 21,931 29,242 Direct 17,309 25,964 34,619Indirect 75 112 149 Indirect 887 1,331 1,774 Indirect 962 1,442 1,923Total 2,763 4,145 5,526 Total 15,508 23,262 31,016 Total** 18,271 27,406 36,542

Elasticity -0.1 -0.15 -0.2 Elasticity -0.033 -0.05 -0.067 Elasticity Low Medium HighDirect 4,423 6,635 8,846 Direct 22,803 34,204 45,606 Direct 27,226 40,839 54,452Indirect 96 144 192 Indirect 1,345 2,017 2,689 Indirect 1,441 2,161 2,882Total 4,519 6,779 9,038 Total 24,148 36,221 48,295 Total** 28,667 43,000 57,334

Estimated Job Losses in 2017 at Different Elasticities under the $10.10 Minimum Wage Option

Teenagers (16-19 years old) Adults (20 years and older) Total - All WorkersRural Rural Rural

Urban Urban Urban

Pennsylvania Pennsylvania Pennsylvania


Estimated Income Losses in 2017 due to Minimum Wage Increase - $9.00 Option


Estimated Income Losses in 2017 due to Minimum Wage Increase - $10.10 option


Technical Appendix

Ripple Effect Calculation Justification for the model

Just like when a pebble thrown on the pond creates a series of ripples that die out slowly, when the minimum

wage is increased, the wage disturbance will not just happen and end at the new minimum wage. The following

model is one possibility. Like the CBO, we assume that the ripple effect goes to half the increase in Minimum

Wage rate.

Under the $9.00 option, it is not reasonable to assume that everyone earning from $7.25 to $9 will be pushed to

$9. What is reasonable is to assume that the employer may differentiate between workers making different

wages; i.e., the employer should value someone who gets paid $8.50 more than another making $7.50. So, the

employer will somehow want to differentiate between them even after the minimum wage increase. For the $9

option, the increase from $7.25 to $9.00 is $1.75. So, the indirect effect is 50% of $1.75 = $0.875; meaning the

ripple effect ends at $9 + $0.875 = $9.875.

In this scenario, the biggest increase for someone earning $7.25 is $1.75; the smallest increase is $0 when the

ripple effect ends at $9.875. So, for someone earning $X per hour, the change in wage rate can be calculated by

using the slope = 1.75/ (9.88-7.25) = 2/3

$1.75 $7.25 Wage = X $9.00 $9.88

Δ wage = (9.875 – X) x 2/3

The new wage rate for that person = old wage + Δ wage

= X + (9.875 – X) * 2/3

= (X + 19.75) / 3


For example, applying the above formula gives the following old and new wages;

For the $10.10 option, the increase from $7.25 is $2.85. So, the indirect effect is 50% of $2.85 = $1.425,

meaning the ripple effect ends at $10.10 + $1.425 = $11.525.

In this scenario, the biggest increase for someone earning $7.25 is $2.85; the smallest increase is $0 when the

ripple effect ends at $11.525. So, for someone earning $X per hour, the change in wage rate can be calculated by

using the slope = 2.85/ (11.525 - 7.25) = 2/3

Δ wage = (11.525 – X) x 2/3

The new wage rate for that person = old wage + Δ wage

= X + (11.525 – X) * 2/3

= (X + 23.05) / 3

For example, applying the above formula gives the following old and new wages;

Old Wage = X New Wage7.25 9.008.25 9.339.00 9.589.25 9.679.50 9.759.88 9.88

Old Wage = X New Wage7.25 10.108.25 10.439.25 10.77

10.25 11.1010.75 11.2711.25 11.4311.53 11.53


The Center for Rural Pennsylvania Board of Directors

Chairman Senator Gene Yaw

Vice Chairman

Representative Garth D. Everett

Treasurer Representative Sid Michaels Kavulich

Secretary

Dr. Nancy Falvo Clarion University

Dr. Livingston Alexander University of Pittsburgh

Stephen M. Brame

Governor’s Representative

Dr. Michael A. Driscoll Indiana University

Dr. Stephan J. Goetz

Northeast Regional Center for Rural Development

Dr. Timothy Kelsey Pennsylvania State University

The Center for Rural Pennsylvania 625 Forster St., Room 902

Harrisburg, PA 17120 Phone: (717) 787-9555

www.rural.palegislature.us 1P0417

http://www.rural.palegislature.us/

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