ANALYSIS OF THE PENNSYLVANIA MINIMUM WAGE

ANALYSIS OF THE

PENNSYLVANIA

MINIMUM WAGE

MINIMUM

WAGE

ADVISORY

BOARD

MARCH 2024

Commonwealth of Pennsylvania

Minimum Wage Advisory Board Members

Chairperson

Christopher S. Hallock

Acting Deputy Secretary

Pennsylvania Department of Labor & Industry

651 Boas St.

Harrisburg, PA 17121

Labor Representatives

Samantha Shewmaker

SEIU Local 668

Communications and Policy Liaison

2589 Interstate Drive

Harrisburg, PA 17110

Barbara Johnson

Representative

UFCW Local 1776

3031-A Walton Road

Suite 201

Plymouth Meeting, PA 19462

General Public Representatives

Nadia Hewka

Senior Staff Attorney

Community Legal Services

1424 Chestnut St.

Philadelphia, PA 19102

Stephen Herzenberg

Executive Director

Keystone Research Center

412 North 3rd Street

Harrisburg, PA 17101

Employer Representatives

Alex Halper

Senior Vice President, Government Affairs

Pennsylvania Chamber of Business and Industry

417 Walnut Street

Harrisburg, PA 17101

Scott D. Briggs

Vice President of Human Resources & Communications

Knouse Foods, Inc.

800 Peach Glen-Idaville Road

Peach Glen, PA 17375

Warren Hudak

President

Hudak & Company

1104 Fernwood Avenue

Camp Hill, PA 17011

Preface

The General Assembly of Pennsylvania, in 2006, via Act 2006-112, amended the Minimum

Wage Act and raised the state’s minimum wage from $5.15 an hour to $6.25 on Jan. 1, 2007,

and to $7.15 on July 1, 2007. The minimum wage had last been raised in 1997. Effective July

24, 2009, the federal minimum wage increased from $6.55 an hour to $7.25. This change

reflected the third and final federal minimum wage increase provided by the amended Fair

Labor Standards Act (FLSA). As mandated by Act 2006-112 and FLSA, Pennsylvania’s

minimum wage also increased to $7.25, which became effective the same date as the federal

minimum wage increase under the FLSA.

The amended Minimum Wage Act directs the Pennsylvania Department of Labor & Industry

to produce an annual report by March 1 detailing data on the previous calendar year’s

demographics and any other relevant characteristics of workers paid the minimum wage or

below. This duty is assigned by the Secretary of Labor & Industry to the Center for

Workforce Information & Analysis (CWIA).

Contents

Page

Introduction

1

Summary

3

I. Wage Distribution of All Hourly Workers

9

II. Comparison of Minimum Wage or Below Worker

Characteristics to Other Populations

11

III. Industry and Occupational Distributions

17

IV. Recent Historical Comparisons (One and Five Years)

21

V. Historical Perspective: Minimum Wage in

Relation to Inflation and the Poverty Threshold

27

VI. Other States

33

Appendixes

37

Terms, Definitions and Sources

38

Table of Industry Distributions

Table of Occupational Distributions

40

41

Programs that May Assist Low Income Workers

Minimum Wage Changes: Pennsylvania and the U.S.

42

43

Minimum Wage Report 1

Introduction

This report contains statistical information on Pennsylvanians who earn hourly wages,

including those who earn the minimum wage or less, analyzes demographic

characteristics of hourly workers, details the industry characteristics of those making at or

near the minimum wage, discusses the issues of inflation and poverty in relation to the

minimum wage, and considers other states’ minimum wage data.

Wage rates used in this report refer to the wage rates earned by hourly workers at

their main jobs, excluding overtime pay, tips and commissions. A portion of workers

reported as making minimum wage or below may have received additional compensation

such as tips. Employers are legally obligated to supplement the earnings of tipped

employees, as necessary, to ensure that hourly rates received are never below the

minimum wage.

Pennsylvania last raised its minimum wage on July 24, 2009, from $7.15 to $7.25, when the

federal minimum wage was increased from $6.55 to $7.25. It has remained at $7.25 since.

While the nominal minimum wage has not changed since 2009, changes in the economy

and other factors have impacted those earning the minimum wage or less.

The primary data source used for this report is the Current Population Survey (CPS), a

nationwide monthly survey of about 60,000 households of which roughly 2,000 are in

Pennsylvania, conducted by the U.S. Bureau of the Census (Census) for the federal Bureau

of Labor Statistics (BLS). The CPS is the primary source of information on the labor force

characteristics of the civilian noninstitutional population. Respondents are interviewed to

obtain information about the employment status of each member of the household 15 years

of age or older. This report focuses on individuals 16 years of age and older.

Both federal and state law provide for several exemptions and lower thresholds to the

minimum wage for certain employers and certain job classifications. Farm workers, some

seasonal workers, and newspaper deliverers are exempt from both state and federal

minimum wage law while lower minimum wages are allowed for tipped employees and full-

time students. Other exemptions that were based on the number of employees employed by

the business or the age of the worker have expired. The CPS data lack direct indicators to

permit removal of exempt individuals.

The cohort of workers earning above but close to the minimum wage are considered “near

minimum wage,” a category without a precise range. A formal analysis of this cohort began

with the 2013 report at which time it was defined as $7.26 to $9.25. From 2015 to 2017, it

was defined as between $7.26 and $10.10. It has been defined as $7.26 to $12.00 since the

2018 report due to recent interest in a minimum wage of $12.00. As “near minimum wage”

is not standard, one should not compare characteristics of this group to previous reports.

Pennsylvania’s minimum wage data and analyses in this report should be used with some

caution due to the small size of the CPS sample. It should also be noted that the report

utilizes the most current final annual data available at the time of publication. Demographic

data from the CPS and inflation data from the Consumer Price Index (CPI) are from 2023,

the calendar year of the report. However, the most recent data on poverty thresholds and

the state’s average wage are lagged a year and based on 2022 data, because the data for

the most current calendar year will not be released until later this year.

Minimum Wage Report

2

Note: This report has been prepared using available data from the U.S. Bureau of the

Census and the federal Bureau of Labor Statistics. While it is a comprehensive analysis

of data collected on at or below minimum wage workers in the state and the nation, there

are limitations of the data. Details of the reliability of CPS estimates can be found at,

https://www.bls.gov/cps/eetech_methods.pdf, while limitations of subnational (e.g., state)

data can be found at https://www.bls.gov/opub/geographic-profile/home.htm.

While reliable data on minimum wage and price levels go back at least as far as the

inception of the Federal Minimum Wage Law (1938), reliable historical demographic data

of the minimum wage or below populations of years prior to 1994 are not readily available

and might not be comparable with the current minimum wage or below population due to

definitional and methodological changes over time. These would include changes in

categories of race and ethnicity, industry and occupational classifications, and methods of

collecting and weighting samples. Reliable estimates of the current percentage of at or

below minimum wage workers in Pennsylvania who are working part time involuntarily

(i.e., they would prefer to work full time and only work part time due to no full-time

opportunities) are also not currently available.

Although the survey can be used to analyze the minimum wage or below population, it

was not specifically designed to do so and therefore may lead to both overcounting and

undercounting of certain segments of the minimum wage or below population. For

instance, tipped employees, such as servers, may legally be paid a lower cash minimum

wage, which is usually referred to as the tipped minimum wage ($2.83 per hour in

Pennsylvania since 1997), due to the employer being able to offset the cash wage paid

with a tip credit; however, employers are legally obligated to supplement their earnings if

necessary to ensure that hourly rates are never below the minimum wage. Such

employees may inaccurately be included in the category of those earning below the

minimum wage although their combined earnings including tips may be at or above the

minimum wage. Alternatively, with respect to wage rate data, salaried and other non-

hourly workers are excluded from the survey. This may lead to undercounting the number

of workers earning at or below the minimum wage.

Further, many characteristics of the minimum wage or below population that might be

desirable to measure are not captured in the survey. For example, the average length of

time for which a person earns the minimum wage is not measured. The survey is a

federally taken snapshot in time and does not gather such information. Analysis of such

data would require the commissioning and conducting of an additional survey.

Beginning in January 2023, in order to improve confidentiality, the Census Bureau made

two types of changes to the CPS Public Use File. The first change involved the method

of reporting (or suppressing) data in substate geographies with relatively smaller

populations. Since this report only uses statewide data, these changes had no impact on

this report. The second change involved the rounding and dynamic topcoding of wage

rates. Since this report relies on hourly earnings, this change affected the data used,

making the wage distribution slightly less accurate with fewer reported wage rates (each

with a greater weight). However, for wages less than $30.00, the largest rounding is to the

nearest $0.05. The Census Bureau has added a flag for $7.25, so the number of workers

at or below the minimum wage can still be estimated; however, the median wage could be

off by $0.02.

Minimum Wage Report 3

Summary

The purpose of the minimum wage is to set a minimum threshold of wages for workers. On

July 24, 2009, Pennsylvania raised the minimum wage to $7.25 as provided by the amended

Fair Labor Standards Act (FLSA). This report describes the characteristics of earners at or

below the minimum wage and the industries that employ them.

Wage Distribution of All Hourly Workers

• In 2023, there were an estimated 67,800 Pennsylvania workers earning minimum

wage or less. This is the third lowest number of at or below minimum wage workers

on record in this annual report series. It is 4,200 (+6.6 percent) higher than the low in

2022 when it was 63,600. Surprisingly, this occurred despite a decrease in the

number of hourly workers and a general increase in wages, both of which would tend

to decrease the volume of workers earning the minimum wage or less. Workers

earning minimum wage or less represented 2.1 percent of all hourly workers and 1.1

percent of all workers.

• From 2022 to 2023, Pennsylvania’s hourly employment decreased by 16,600 workers

(-0.5 percent), while its overall employment increased by 207,500 workers (+3.4

percent). U.S. hourly employment increased by 1,782,000 workers (+2.3 percent),

while the nation’s overall employment increased by 2,745,000 workers (+1.7 percent).

The proportion of all workers receiving hourly rates decreased in Pennsylvania and

increased in the nation from 2022. In 2022, the percentage of the employed earning

hourly rates was higher in Pennsylvania (51 percent) than in the U.S. overall (50

percent).

• In 2023, there were an estimated 335,100 Pennsylvania workers earning near

minimum wage ($7.26 - $12.00). This was 82,700 workers (19.8 percent) lower than

in 2022 when it was 417,800. In the nation, the number of workers in this wage

category fell by an even greater percentage (24.3 percent).

• In 2023, the U.S. and Pennsylvania had similar experiences regarding increases in

employment and wages. Both wage distributions also shifted away from wage

categories between $7.25 and $15.00 [at minimum wage, near minimum wage ($7.26

- $12.00), and $12.01 - $15.00], while increasing in both volume and percentage in

the above $15.00 category. However, Pennsylvania and the nation diverged on the

number of hourly workers and workers earning below $7.25 (which caused the

number of at or below minimum wage workers to diverge as well). The median wage

for hourly workers in Pennsylvania increased from $18.16 in 2022 to $19.85 in 2023,

while it rose from $18.00 to $19.20 in the nation.

• Pennsylvania had a higher percentage (2.1 percent) of workers at or below the federal

minimum wage of $7.25 than did the nation (1.1 percent). Almost three out of every four

wage earners in both Pennsylvania and the U.S. were in the highest wage category (of

above $15.00). Pennsylvania’s share of wage earners in this category rose by 3.6

percentage points to 73.1 percent, while the nation’s percentage rose 6.1 percentage points

to 74.8 percent.

Minimum Wage Report

4

Comparison of Minimum Wage or Below Worker Characteristics to Other Populations

• A majority of Pennsylvania earners at or below the minimum wage in 2023 were from

one or more of the following groups vs. its percentage in the population 16 and over:

❑ Female 68% vs. 51%

❑ White 80% vs 78%

❑ 16-to-24-year-olds 54% vs. 14%

❑ Some college, no degree or less 75% vs. 55%

❑ Never married 86% vs. 33%

• Females outnumbered males by almost 2.2 to one (68.4 percent to 31.6 percent)

among at or below minimum wage workers in Pennsylvania during 2023.

• Pennsylvania’s workers who earned above the minimum wage were approximately

equally likely to be male or female and often were from one or more of the following

demographic groups vs. its percentage in the population 16 and over:

❑ White 74% vs. 78%

❑ 25-to-54-year-olds 56% vs. 46%

❑ High school graduates or more 92% vs.90%

❑ Married (now or in the past) 54% vs. 67%

• Pennsylvania’s workers who earned near minimum wage were from one or more of

the following demographic groups vs. its percentage in the population 16 and over:

❑ Female 62% vs. 51%

❑ White 69% vs.78%

❑ 16-to-24-year-olds 55% vs. 14%

❑ High school graduates or less 64% vs. 42%

❑ Never married 68% vs. 33%

• The proportions of Pennsylvania earners at or below minimum wage who were either

female, 16-to-24-year-old, non-high school graduates, or never married were higher

than their corresponding proportions in the population and were most like the

corresponding percentages of minimum wage or below earners in the nation as a

whole, as well as those earning “near minimum wage” in Pennsylvania. White

workers, who constituted eight out of every 10 minimum wage or below earners in

Pennsylvania, were slightly overrepresented relative to their proportion of the

employed Pennsylvania population.

• Workers having no children of their own under age 18 made up 94 percent of those

earning the minimum wage or less in Pennsylvania, while the remaining 6 percent

were split evenly between married and single parents. The family status of those

earning near the minimum wage in Pennsylvania was most similar to Pennsylvania’s

minimum wage or below population, with 91 percent having no children.

• Almost 27 percent of those who earned the minimum wage or less were in families

with less than $50,000 per year in income and 12 percent were in families whose

combined income was less than $30,000 per year. In contrast, almost 45 percent had

annual family incomes of $75,000 or more a year and over 36 percent had annual

family incomes of $150,000 or more per year. See chart on page 15.

Minimum Wage Report 5

Industry and Occupational Distributions

• Pennsylvania workers earning at or below the minimum wage in 2023 were most likely to

be employed in the following industries: food services and drinking places, construction,

and other services. Combined, these industries employed 79 percent of all minimum

wage or below earners in 2023 with food services and drinking places by itself accounting

for 66 percent.

• In 2023, 54 percent of hourly wage workers in Pennsylvania earning the minimum wage

or less worked full time. Seventy-six percent of hourly wage workers earning above the

minimum wage worked full time.

• The retail trade industry in Pennsylvania employs many hourly-paid workers and

accounted for a large proportion of workers earning more than the minimum wage (14

percent) and a higher proportion of those earning the near minimum wage (26 percent).

Historically, a large proportion of workers earning the minimum wage or below worked in

retail trade, but that was not the case in 2023, possibly due to steadily increasing entry-

level wage rates in the industry.

• In 2023, 69 percent of Pennsylvanians who earned the minimum wage or less worked in

food preparation & serving related occupations. Workers earning the minimum wage or

less in construction & extraction occupations (6 percent) or sales & related occupations

(6 percent).

• Food preparation & serving related occupations accounted for only 22 percent of workers

earning near minimum wage and 7 percent of those earning above the minimum wage.

Recent Historical Comparisons (One and Five Years)

• The number of at or below minimum wage workers fell by 28,500 (29.6 percent) from 2018

to 2023. The absolute decrease in the number of at or below minimum wage workers from

2018 most likely reflects the relative decrease in the minimum wage compared to the

average wage in Pennsylvania. Despite an increase in employment over this interval, there

was a small decrease in hourly workers, which may also have contributed to the decline.

• The relative predominance of food services and drinking places in the employment of at

or below minimum wage workers grew from 50.0 percent to 66.4 percent over the five-

year interval as it decreased on an absolute scale by 3,200 workers (6.6 percent).

• The occupational category whose share of minimum wage or less earners increased the

most between 2018 and 2023 was the food preparation & serving related occupations,

which rose by 19 percentage points to 69 percent. This increase in share occurred

despite a decline in the absolute number of such workers. The share of minimum wage or

below earners in the sales & related occupations fell by 8 percentage points over the five-

year interval. On an absolute basis, construction & extraction; farming, fishing & forestry;

and legal occupations were the only occupational category with an increased number and

percentage over the interval. These three occupational categories had no minimum wage

or below representation in 2018. See chart on page 24.

Minimum Wage Report

6

A Historical Perspective on the Minimum Wage in Relation to Inflation and the Poverty Threshold

• In 2006, Pennsylvania’s minimum wage was 26 percent of the average wage, a lower

percentage than at any point since the enactment of a federal minimum wage in 1938.

The increase in the minimum wage to $7.25 in 2009 brought the minimum wage up to 34

percent of the average wage. By 2022, Pennsylvania’s minimum wage had fallen to 23

percent of the average wage, a new all-time low, and was projected to fall to 22 percent

in 2023.

• Inflation adversely affects the purchasing power of an unchanging minimum wage. In

2009, the last year in which the minimum wage increased, the purchasing power of the

minimum wage was $10.30 (in 2023 dollars) and has been steadily declining since then.

The value of the 2023 minimum wage of $7.25 is projected to fall to $7.06 in 2024 and

$6.87 in 2025, after adjustment for forecast inflation.

• In 2022, the annual income for an individual working full time in Pennsylvania making the

minimum wage ($7.25) was $15,080. This income level exceeded the 2022 Federal

Poverty Threshold for a one-person household ($14,880), but fell short of the poverty

threshold for a two-person ($18,900) and a three-person household ($23,280).

Other States

• During 2023, 30 states had higher minimum wage rates than Pennsylvania ranging from

$8.75 to $15.74 per hour. The other 20 states (including Pennsylvania) effectively have a

minimum wage of $7.25. States’ minimum wage rates are discussed on page 34.

• Since the beginning of 2015, all of Pennsylvania’s neighboring states have had higher

minimum wage rates than Pennsylvania. The 2023 minimum wage rates of Pennsylvania’s

neighboring states ranged from $8.75 to $14.20.

• Since 2015, the number of states setting higher minimum wage rates than Pennsylvania

was essentially static, except for Virginia, which became the 30

th

state to set a minimum

wage rate above Pennsylvania’s rate on May 1, 2021.

• In 2023, there were four states with minimum wage rates was of at least $15.00 and

an additional three states, all of which abut Pennsylvania, are projected to join them

in 2024. Most of the states with higher minimum wages than Pennsylvania tie

changes in their minimum wage rates to inflation rates of the Consumer Price Index

or other similar measures to provide automatic increases that keep pace with

inflation.

• Twenty-six states raised their minimum wages in 2023 and with significant overlap 25

states have already done so or are projected to do so in 2024.

• The tipped minimum wage in Pennsylvania has been at $2.83 since 1997. During

2023, 29 states had higher tipped minimum wage rates than Pennsylvania ranging

from $3.27 to $15.74 per hour.

Minimum Wage Report 7

Conclusion

• In 2023, there were an estimated 67,800 Pennsylvania workers earning minimum

wage or less, representing 2.1 percent of all hourly workers and 1.1 percent of all

workers. This is the third lowest number of at or below minimum wage workers on

record in this annual report series and is only 4,200 workers (6.6 percent) higher than

the previous low set in 2022. Surprisingly, this occurred despite a decrease in the

number of hourly workers and a general increase in wages.

• In 2023, 335,100 Pennsylvania workers (10.4 percent) earned above $7.25 per hour

up to $12 per hour and another 467,000 workers (14.4 percent) earned between

$12.01 and up to $15 per hour. Almost three of every four Pennsylvania hourly

workers earned above $15.00 per hour.

• Pennsylvania earners at or below the minimum wage tended to be from one or more

of the following groups: female, White, 16-to-24-year-olds, less than a college

degree, or never married.

• Pennsylvanians earning from $7.26 per hour through $12.00 per hour tended to be

from one or more of the following groups: female, White, 16-to-24-year-olds, high

school graduates or less, or never married.

• The number of at or below minimum wage workers decreased by 28,500 (29.6

percent) from 2018 to 2023. The absolute decrease in the number of at or below

minimum wage workers from 2018 most likely reflects the relative decrease in the

minimum wage compared to the average wage in Pennsylvania.

• Workers earning at or below the minimum wage were most likely to be employed in

the following industries: food services and drinking places, construction, and other

services. Atypically, full-time workers accounted for 54 percent of hourly workers

earning the minimum wage or below.

• Inflation adversely affects the purchasing power of an unchanging minimum wage. In

2009, the last year in which the minimum wage increased, the purchasing power of the

minimum wage was $10.30 (in 2023 dollars) and has been steadily declining since then.

The value of the 2023 minimum wage of $7.25 is projected to fall to $7.06 in 2024 and

$6.87 in 2025 after adjusting for estimated inflation.

• In 2023, 30 states had higher minimum wage rates than Pennsylvania ranging from

$8.75 to $15.74. Since January 1, 2015, all of Pennsylvania’s neighboring states

have minimum wage rates exceeding Pennsylvania’s rate.

• In 2023, there were four states with minimum wage rates of at least $15.00 and an

additional three states, all of which abut Pennsylvania, are projected to join them in

2024. Most of the states with higher minimum wages than Pennsylvania tie changes

in their minimum wage rates to the Consumer Price Index or other similar measures

to provide automatic increases that keep pace with inflation.

• The tipped minimum wage in Pennsylvania has been $2.83 since 1997. During 2023,

29 states had higher tipped minimum wage rates than Pennsylvania.

Minimum Wage Report

8

Minimum Wage Report 9

WAGE DISTRIBUTION OF ALL

HOURLY WORKERS

Minimum Wage Report

10

Pennsylvania and U.S. Employed Wage & Salary Workers Paid Hourly Rates

2023 Average Compared to 2022 Average (numbers of workers in thousands)

Source: U.S. Bureau of the Census, Current Population Survey

Both the U.S. minimum wage and the PA minimum wage were $7.25 during 2022 and 2023.

Totals and differences may not sum due to rounding.

In 2023, there were an estimated 67,800 Pennsylvania workers earning minimum wage or

less. This is the third lowest number of at or below minimum wage workers on record in this

annual report series. It is 4,200 workers (+6.6 percent) higher than the previous low set in

2022 when it was 63,600 workers. The increase was due to a larger increase in those earning

below the minimum wage than the decrease in those earning at the minimum wage. Workers

earning minimum wage or less represented 2.1 percent of all hourly workers and 1.1 percent

of all workers.

Pennsylvania’s hourly employment decreased by 16,600 workers (-0.5 percent), while its

overall employment increased by 207,500 (+3.4 percent). U.S. hourly employment increased

by 1,782,000 workers (+2.3 percent), while the nation’s overall employment increased by

2,745,000 workers (+1.7 percent). The proportion of all workers receiving hourly rates

decreased in Pennsylvania and increased in the nation from 2022. In 2023, the percentage of

the employed earning hourly rates was higher in Pennsylvania (51 percent) than in the U.S.

overall (50 percent), but the gap narrowed.

In 2023, the U.S. and Pennsylvania had similar experiences regarding increases in

employment and wages. Both wage distributions also shifted away from wage categories

between $7.25 and $15.00 [at minimum wage, near minimum wage ($7.26 - $12.00), and

$12.01 - $15.00], while increasing in both volume and percentage in the above $15.00

category. However, Pennsylvania and the nation diverged on the number of hourly workers

and workers earning below $7.25 (which caused the number of at or below minimum wage

workers to diverge as well). Pennsylvania’s share of above $15.00 per hour workers rose to

73.1 percent, while the nation’s percentage rose to 74.8 percent. The median wage in

Pennsylvania increased from $18.16 to $19.85, while it rose from $18.00 to $19.20 in the

nation. Pennsylvania had a higher percentage (2.1 percent) of workers at or below the federal

minimum wage of $7.25 than did the nation (1.1 percent).

2.0%

2.1%

1.3%

1.1%

12.8%

10.4%

10.9%

8.1%

15.7%

14.4%

19.1%

16.0%

69.5%

73.1%

68.7%

74.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PA 2022 PA 2023 U.S. 2022 U.S. 2023

At or below $7.25

$7.26 – $12.00

$12.01 – $15.00

More than $15.00

Total, 16 Years

and Over

2022

2023

US

PA

US

PA

Total Paid an

Hourly Rate

78,813

3,252.5

80,595

3,236.0

Total at or below

$7.25

1,031

63.6

870

67.8

Less than $7.25

887

46.2

788

56.3

At $7.25

144

17.4

82

11.5

$7.26 – $12.00

8,588

417.8

6,498

335.1

$12.01 – $15.00

15,040

509.7

12,904

467.0

More than

$15.00

54,153

2,261.4

60,324

2,366.1

Median Wage

$18.00

$18.16

$19.20

$19.85

Minimum Wage Report 11

COMPARISON OF MINIMUM WAGE

OR BELOW WORKER

CHARACTERISTICS TO OTHER

POPULATIONS

Minimum Wage Report

12

Pennsylvania and U.S. 2023 Averages

Demographic Characteristics of Various Populations

(total numbers of workers in thousands, breakdown by characteristic in percent)

Demographic Characteristics

Minimum Wage or

Below

Above Minimum

Wage

All

Population 16 and Over

Near

Total

Employed

2

PA

1

U.S.

1

PA

U.S.

TOTAL

67.8

870

335.1

3,168.2

6,358.8

10,489.9

266,938

Gender

Male

31.6%

31.3%

38.2%

50.3%

52.0%

48.8%

48.9%

Female

68.4%

68.7%

61.8%

49.7%

48.0%

51.2%

51.1%

Race

Black, non-Hispanic

15.8%

14.0%

11.3%

11.9%

9.7%

9.9%

12.1%

Hispanic

0.0%

19.4%

10.7%

8.6%

6.8%

6.2%

17.8%

Other, non-Hispanic

4.3%

7.5%

9.4%

5.7%

6.6%

6.2%

9.2%

White, non-Hispanic

79.8%

59.2%

68.6%

73.8%

76.9%

77.7%

60.9%

Age

16-19

31.6%

18.9%

30.4%

6.9%

4.1%

5.9%

6.4%

20-24

22.3%

25.5%

24.2%

14.1%

9.3%

8.1%

8.3%

25-34

20.6%

26.2%

8.1%

21.8%

16.1%

16.7%

35-44

10.9%

12.9%

9.6%

17.9%

20.9%

15.2%

16.3%

45-54

8.6%

7.9%

9.1%

16.0%

19.3%

14.5%

15.0%

55-64

2.0%

5.6%

7.1%

16.4%

17.3%

15.9%

15.5%

65 and over

4.1%

3.0%

11.5%

7.0%

7.4%

24.3%

21.8%

Education

Less than a high school diploma

28.3%

16.2%

26.0%

8.4%

6.2%

10.3%

11.9%

High school graduates, no college

17.8%

29.1%

38.0%

37.7%

27.1%

31.6%

28.0%

Some college, no degree

29.1%

26.9%

20.4%

16.9%

12.8%

13.2%

15.7%

Associate degree

2.3%

8.0%

7.9%

11.2%

9.8%

9.4%

9.7%

Bachelor's degree or higher

22.4%

19.8%

7.7%

25.8%

44.0%

35.6%

34.6%

Marital Status

Married Spouse Present

7.7%

20.9%

21.1%

40.8%

51.3%

48.7%

48.8%

Marital Status Other

6.5%

10.7%

10.9%

13.6%

12.8%

18.2%

18.5%

Never Married

85.8%

68.3%

67.9%

45.6%

35.9%

33.1%

32.7%

1

Both the U.S. and PA minimum wages were $7.25 during 2023.

2

All Employed includes hourly workers (minimum wage or below and above minimum wage) and workers not earning an hourly wage.

Totals may not sum due to rounding.

Source: U.S. Bureau of the Census, Current Population Survey

Gender

The gender composition of Pennsylvania’s at or below minimum wage workers was most

similar to that of other workers in the U.S. earning at or below minimum wage and to a lesser

extent to those in Pennsylvania earning the near minimum wage ($7.26 to $12.00). The overall

population of those 16 years and older in both Pennsylvania and the U.S. was almost evenly

divided between males and females with a slight edge to females. Similarly, the total

population of those earning above the minimum wage in Pennsylvania and the Pennsylvania

population of all employed, was evenly divided, but with males being in the majority. In

contrast, females outnumbered males by 68.4 percent to 31.6 percent among at or below

minimum wage workers in Pennsylvania during 2023.

Race

White workers represented a significant majority of Pennsylvania’s at or below minimum wage

workers, as they did for all of Pennsylvania’s other reported wage categories. White workers

were slightly underrepresented in all of the above minimum wage categories depicted relative

to their percentage of all employed, while being overrepresented among workers earning at or

below the minimum wage.

Black Workers made up the second largest group of minimum wage or below workers, as well

as in all the other wage categories depicted and among all employed in Pennsylvania. Black

workers were overrepresented in their proportion of at or below minimum wage workers

relative to their percentage of employed in Pennsylvania.

Minimum Wage Report 13

Hispanic workers and Other non-Hispanic workers earning at or below the minimum wage

were underrepresented relative to their proportion of the employed in Pennsylvania.

Nationally among at or below minimum wage workers, Black and Hispanic workers were

overrepresented, while White and Other workers were underrepresented relative to their

overall populations.

Age

Source: U.S. Bureau of the Census, Current Population Survey

Among Pennsylvania’s minimum wage or below population, about 54 percent was under 25

years of age, while another 40 percent were between 25 and 54 years. In comparison, in the

employed population of Pennsylvania slightly more than 13 percent of all employed were

under 25 years of age and almost 62 percent of the employed group were between 25 and 54

years of age.

Slightly more than 6 percent of minimum wage or below workers were 55 years old or older

compared to almost 25 percent of the employed population in Pennsylvania. The 55-64 and

65 and over age groups together constituted over 40 percent of the Pennsylvania population

who were at least 16 years old.

0%

5%

10%

15%

20%

25%

30%

35%

16-19 20-24 25-34 35-44 45-54 55-64 65 and over

A Comparison of the 2023 Age Distributions of

Five Populations in Pennsylvania

MW and Below Near MW Above MW All Employed Population 16 and Over

Minimum Wage Report

14

Education

In general, at or below minimum wage workers in Pennsylvania tended to be less educated than

other employed workers in the state. Those with a high school diploma or less accounted for 46

percent of those earning the minimum wage or less in 2023, compared to 33 percent for all

employed. At the other end of the education spectrum, less than 25 percent of minimum wage or

below workers had at least an associate degree, while the percentage of all employed with at

least an associate degree was almost 54 percent. More than 22 percent of those earning the

minimum wage or less had bachelor’s degrees compared to 44 percent among all employed in

Pennsylvania.

Marital Status

Source: U.S. Bureau of the Census, Current Population Survey

A sizable majority (85.8 percent) of minimum wage earners had never been married. The

remainder was divided between those who were married with spouse present at 7.7 percent

and those with a marital status of other (divorced, separated, or widowed) at 6.5 percent.

85.8%

68.3%

67.9%

45.6%

35.9%

33.1%

32.7%

6.5%

10.7%

10.9%

13.6%

12.8%

18.2%

18.5%

7.7%

20.9%

21.1%

40.8%

51.3%

48.7%

48.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PA Min Wage US Min Wage PA Near Min

Wage

PA Above Min

Wage

PA All Employed PA POP 16+ US POP 16+

Distributions of Marital Status:

Various Populations 2023

Never Married Marital Status Other Married Spouse Present

Minimum Wage Report 15

Family Status and Family Income of Workers Paid Hourly Rates:

2023 Selected Groups in Pennsylvania and the U.S.

(total numbers of workers in thousands, breakdown by characteristic in percent)

Characteristics

At or Below the Minimum

Wage

Above the Minimum Wage

Total Hourly

Workers

Near

Total

PA

1

U.S.

1

PA

U.S.

TOTAL

67.8

870

335.1

3,168.2

80,595

Family Status

2

No Children (Single or Married)

94%

79%

91%

74%

73%

Married Parent

3%

11%

5%

18%

19%

Single Parent

3%

9%

4%

8%

1 child

3%

5%

4%

5%

2 children

0%

2%

3 children

0%

2%

0%

1%

4 or more children

0%

Family Annual Income

$9,999 or less

7%

5%

2%

1%

2%

$10,000 to $19,999

6%

5%

12%

4%

$20,000 to $29,999

0%

9%

5%

6%

$30,000 to $39,999

9%

13%

7%

8%

10%

$40,000 to $49,999

5%

8%

6%

8%

$50,000 to $59,999

10%

8%

9%

$60,000 To $74,999

18%

10%

14%

12%

$75,000 To $99,999

8%

9%

16%

15%

$100,000 To $149,999

0%

13%

18%

17%

18%

$150,000 and Over

36%

19%

18%

16%

1

PA and U.S. minimum wages in 2023 were $7.25.

2

Classification of an individual as a parent requires having at least one own child under the age of 18. All references to children also refer to own children under the age of 18.

Totals in the table are rounded to the nearest percent and may differ from those in the text and may not sum correctly due to rounding.

Percentages less than one half of one percent were rounded to 0 percent.

Source: U.S. Bureau of the Census, Current Population Survey

Workers having no children made up 94 percent of those earning the minimum wage or less

in Pennsylvania. Among those earning near the minimum wage in Pennsylvania, married

parents constituted a smaller percentage (5 percent) than in the other U.S. and Pennsylvania

populations depicted above, except for minimum wage or below earners in Pennsylvania,

which had a married parent cohort of 3 percent. In 2023, 100 percent of single parents in the

Pennsylvania minimum wage or below population had one child. The family status of those

earning near the minimum wage in Pennsylvania was more like Pennsylvania’s minimum

wage or below population than either the nation’s at or below minimum wage population or

Pennsylvania’s above minimum wage population.

The family income of those who earned the minimum wage or less in Pennsylvania varied

greatly. Slightly less than 27 percent of such workers were in families whose combined

income was less than $50,000 per year and 12 percent were in families with less than

$30,000 per year. In contrast, almost 45 percent had annual family incomes of $75,000 or

more a year and over 36 percent had annual family incomes of $150,000 or more per year.

The family income distribution of near minimum wage workers in Pennsylvania was most like

that of the U.S. minimum wage or below population.

Due to the small sample of minimum wage and below workers in Pennsylvania and the

smaller cohorts within that sample, care should be taken in interpreting results such as these.

Minimum Wage Report

16

Minimum Wage Report 17

INDUSTRY AND OCCUPATIONAL

DISTRIBUTIONS

Minimum Wage Report

18

Source: U.S. Bureau of the Census, Current Population Survey

PA and U.S. minimum wages in 2023 were both at $7.25.

In Pennsylvania, workers earning at or below the minimum wage were most likely to be

employed in the following industries: food services and drinking places, construction, and

other services. Combined, these industries employed 79 percent of all minimum wage earners

in 2023.

Sixty-six percent of minimum wage or below earners worked at food services and drinking

places. In contrast, only 7 percent of those earning above minimum wage worked in this

industry. Workers in this industry may earn above the minimum wage when tips are included;

however, they are counted as below minimum wage earners since the measured wage

excludes tips.

The declining trend in the number of minimum wage or below workers has led to fewer

industry groups having minimum wage workers, and even those with representation had

relatively few. In 2023, despite a small increase in the number of minimum wage or below

workers, excluding the top three industry groups mentioned above, each of the remaining

industry groups had less than 5 percent of the minimum wage workers and minimum wage

workers were absent from over 47 percent of the industry groups.

The retail trade industry in Pennsylvania employs many hourly-paid workers and accounted for

a large proportion of workers earning more than the minimum wage (14 percent) and a higher

proportion of those earning the near minimum wage (26 percent). Historically, a large

proportion of workers earning the minimum wage or below were in retail trade, but due to

steadily increasing entry-level wage rates in the industry that proportion has been declining.

Retail trade, in combination with non-hospital health care services and manufacturing,

accounted for 37 percent of all those earning above the minimum wage in 2023.

More detailed information on these industry distributions as well as that of the near minimum

wage population can be found in the Appendix on page 40.

0% 10% 20% 30% 40% 50% 60% 70%

Wholesale trade

Transportation and utilities

Social assistance

Retail trade

Public administration

Professional and business services

Other services

Mining

Manufacturing

Information

Hospitals

Health care services, except hospitals

Food services and drinking places

Financial activities

Educational services

Construction

Arts, entertainment, and recreation

Agriculture, forestry, fishing, and hunting

Accommodation

A Comparison of Industry Distributions in 2023 of Various Populations:

Pennsylvania and the United States

PA Above Minimum Wage

U.S. Minimum Wage or Below

PA Minimum Wage or Below

Minimum Wage Report 19

Source: U.S. Bureau of the Census, Current Population Survey

PA and U.S. minimum wages in 2023 were both at $7.25.

Any worker who works at least 35 hours for pay (aggregate) in the survey week is classified by

the Census as full time. This is irrespective of whether those hours were worked at one or

more jobs. Conversely, any worker whose cumulative hours worked in the survey week was

between one and 34 hours is classified as part time.

In 2023, more than one half of at or below minimum wage earners in Pennsylvania worked full

time. More than three out of four of all hourly workers earning above the minimum wage in

Pennsylvania worked full time. The ratio of full-time to part-time minimum wage or below

workers in Pennsylvania was closest to that of the nation’s minimum wage or below

population. The ratio of full-time to part-time near minimum wage workers in Pennsylvania was

lowest among the populations depicted. Typically, the ratio of full-time to part-time minimum

wage or below workers in Pennsylvania has been less than one (i.e., there were fewer full-

time workers than part-time workers), however that was not the case in 2023.This may be

indicative of a dramatic change in the composition of minimum wage or below workers in

Pennsylvania, a nonrepresentative sample in the CPS, or both.

54.3%

54.5%

32.4%

75.7%

45.7%

45.5%

67.6%

24.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PA Minimum Wage and Below U.S. Minimum Wage and Below PA Near Minimum Wage PA Above Minimum Wage

Distribution of Workers Between Full Time and Part Time:

2023 Various Populations

Full-time Part-time

Minimum Wage Report

20

Both the PA and U.S. minimum wages were $7.25 in 2023.

Source: U.S. Bureau of the Census, Current Population Survey

In 2023, 69 percent of Pennsylvanians who earned the minimum wage or less worked in food

preparation & serving related occupations, 6 percent were employed in construction & extraction

occupations and 6 percent in sales & related occupations. Minimum wage or below workers in

the U.S. were slightly less concentrated in the food preparation & serving occupational group

than those of Pennsylvania (66 percent compared with 69 percent) and had a more diverse

distribution of occupations.

The distribution of occupations for Pennsylvanians who earned above the minimum wage was

more diverse than those who earned the minimum wage or less. Their top four occupational

groups were office & administrative support (13 percent), transportation & material moving (13

percent), sales & related (9 percent), and healthcare practitioner & technical (8 percent). Food

preparation & serving related occupations accounted for only 22 percent of workers earning

near minimum wage and 7 percent of those earning above the minimum wage. Workers

earning above the minimum wage were represented in all 22 of the listed occupational groups,

while only 41 percent of them had representation from the at or below minimum wage cohort.

More detailed information on these occupational distributions as well as that of the near

minimum wage population can be found in the Appendix on page 41.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%

Transportation & Material Moving

Sales & Related

Protective Service

Production

Personal Care & Service

Office & Administrative Support

Management

Life, Physical & Social Service

Legal

Installation, Maintenance & Repair

Healthcare Support

Healthcare Practitioner & Technical

Food Preparation & Serving Related

Farming, Fishing & Forestry

Education, Training & Library

Construction & Extraction

Computer & Mathematical Science

Community & Social Service

Business & Financial Operations

Building and Grounds Cleaning & Maintenance

Arts, Design, Entertainment, Sports & Media

Architecture & Engineering

2023 Occupational Group Distributions: Pennsylvania’s Minimum Wage and Below

Population Compared to its Above Minimum Wage Population and the Minimum Wage

and Below Population of the U.S.

PA Above Minimum Wage

U.S. Minimum Wage and Below

PA Minimum Wage and Below

Minimum Wage Report 21

RECENT HISTORICAL COMPARISONS

(ONE AND FIVE YEARS)

Minimum Wage Report

22

Pennsylvania

Demographic Characteristics of Workers Paid Hourly Rates at or Below the Minimum Wage

Annual Average 2023 Compared to Annual Average 2022 and 2018

(total numbers of workers in thousands, all other numbers in percent)

Demographic Characteristics

2018

2022

2023

Percentage

Point Change

PA

1

PA

2

PA

2

2018 to 2023

2022 to 2023

TOTAL

96.3

63.6

67.8

-

Gender

Male

31%

27%

32%

0%

4%

Female

69%

73%

68%

0%

-4%

Race

Black, non-Hispanic

11%

10%

16%

5%

6%

Hispanic

5%

8%

0%

-5%

-8%

Other, non-Hispanic

12%

2%

4%

-8%

2%

White, non-Hispanic

71%

80%

9%

0%

Age

16-19

37%

23%

32%

-5%

8%

20-24

23%

19%

22%

0%

3%

25-34

15%

13%

21%

5%

7%

35-44

5%

17%

11%

6%

-6%

45-54

7%

11%

9%

1%

-3%

55-64

7%

10%

2%

-5%

-8%

65 and over

6%

4%

-2%

Education

Less than a high school diploma

35%

10%

28%

-7%

18%

High school graduates, no college

28%

43%

18%

-10%

-25%

Some college, no degree

16%

33%

29%

13%

-4%

Associate degree

8%

2%

-6%

1%

Bachelor's degree or higher

13%

22%

10%

Marital Status

Married Spouse Present

17%

22%

8%

-9%

-15%

Marital Status Other

6%

4%

7%

0%

2%

Never Married

77%

74%

86%

9%

12%

1

The minimum wage in 2018, 2022, and 2023 was $7.25 and was unchanged during those years.

Totals and changes may not sum due to rounding.

Source: U.S. Bureau of the Census: Current Population Survey

From 2018 through 2023, the minimum wage in Pennsylvania was constant at $7.25, having last

been increased in July 2009. During that period, the number of minimum wage or below workers in

Pennsylvania declined by 28,500 or 29.6 percent. Labor market conditions from 2018 through

2023 improved in Pennsylvania (except during the period of the pandemic and the response to it,

when there was a steep decline in total and hourly employment), as evidenced by the growth in

employment as well as by an increase in average wages. Wages continued to increase due to the

employment recovery (which began in 2020) and the higher inflation following the pandemic. The

increased wages led to the continued trend of fewer minimum wage or below workers. Despite an

increase in total employment over this period, there was a small decline in hourly employment,

which may have also contributed to the decline in the number of minimum wage or below workers.

In 2023, males comprised 32 percent of minimum wage or below workers. This represented a

small increase from 2018 and an increase of 4 percentage points from 2022.

From 2018 to 2023, the proportions of Pennsylvania’s minimum wage or below earners under 25

years of age or over 54 years of age decreased. Relative to 2022 the age distribution of 2023 was

younger, as the 55 and older proportion shrunk while the percentage of those below age 25 grew.

Over the last 5 years, the composition of minimum wage or below workers shifted towards non-

Hispanic White and Black workers and away from Hispanic and Other non-Hispanic workers.

The demographic changes from 2022 to 2023 were even more volatile than those from five years

ago. The small sample of minimum wage or below workers may explain some of the recent

volatility in the demographic characteristics.

Minimum Wage Report 23

1

The minimum wage was constant at $7.25 from 2018 through 2023.

Source: U.S. Bureau of the Census: Current Population Survey

In 2018, 2022, and 2023, workers earning at or below the minimum wage were most likely to be

employed in food services & drinking places. Over the five-year interval, while the absolute

number of minimum wage workers in that industry declined its percentage increased

dramatically. Retail trade typically had been the second ranked industry group in terms of

number of minimum wage or below workers. Such was the case in 2018 when 20 percent of

minimum wage or below workers were in retail trade. The representation of this industry group

fell by 12 percentage points by 2022 and in 2023 was down to 3 percent. The trend of

decreasing numbers of minimum wage workers in retail trade is likely due to the steadily

increasing beginning wage rates in that industry, particularly among large employers. The

number of minimum wage or below workers in manufacturing rose by more than 52 percent

between 2018 and 2023. In addition, over that period, the number of minimum wage or below

workers in construction went from zero to 4,300, an increase of 6.3 percentage points.

The decrease in workers earning minimum wage or below from 2018 to 2023 has been

accompanied by fewer industry groups having representation of such workers. In 2023 there

were nine industry groups without any representation from minimum wage or below workers.

The largest volume decreases in the number of minimum wage or below workers over the last

five years were in retail trade and educational services. Retail trade fell by 91 percent, while

educational services lost its total representation of minimum wage or below workers.

Between 2018 and 2023, the proportion of hourly workers earning the minimum wage or less

who worked full time increased from 20.4 percent to 54.3 percent, after rising to 30.0 percent in

2022. The number of minimum wage or below workers who were full time increased by 87.5

percent despite the total number of workers earning the minimum wage or less declining by 29.6

percent over this 5-year interval.

0% 10% 20% 30% 40% 50% 60% 70%

Wholesale trade

Transportation and utilities

Social assistance

Retail trade

Public administration

Professional and business services

Other services

Mining

Manufacturing

Information

Hospitals

Health care services, except hospitals

Food services and drinking places

Financial activities

Educational services

Construction

Arts, entertainment, and recreation

Agriculture, forestry, fishing, and hunting

Accommodation

A Comparison of Industry Distributions of Pennsylvania’s Workers Earning

At or Below the Minimum Wage: 2023 vs. 2022 and 2018

1

2018

2022

2023

Minimum Wage Report

24

Occupational Characteristics of Wage & Salary Workers Paid Hourly Rates at or Below the Minimum Wage

Pennsylvania Annual Average 2023 Compared to Annual Average 2022 and 2018

(total numbers of workers in thousands, all others are in percent)

Occupation

2018

2022

2023

Percentage

Point Change

PA

1

PA

1

PA

1

2018 to 2023

2022 to 2023

TOTAL

96.3

63.6

67.8

-

Architecture & Engineering

0%

2%

0%

-2%

Arts, Design, Entertainment, Sports & Media

0%

4%

0%

-4%

Building and Grounds Cleaning & Maintenance

4%

0%

-4%

Business & Financial Operations

0%

2%

0%

-2%

Community & Social Service

0%

Computer & Mathematical Science

0%

Construction & Extraction

0%

6%

Education, Training & Library

0%

Farming, Fishing & Forestry

0%

2%

4%

2%

Food Preparation & Serving Related

50%

51%

69%

19%

18%

Healthcare Practitioner & Technical

0%

Healthcare Support

4%

6%

3%

-1%

-4%

Installation, Maintenance & Repair

1%

0%

-1%

0%

Legal

0%

2%

Life, Physical & Social Service

0%

Management

0%

Office & Administrative Support

11%

13%

2%

-9%

-11%

Personal Care & Service

7%

3%

-4%

Production

2%

0%

-2%

0%

Protective Service

0%

Sales & Related

14%

6%

-8%

0%

Transportation & Material Moving

9%

3%

5%

-3%

3%

1

The PA minimum wage in 2018, 2022, and 2023 was $7.25.

Totals and changes may not add up due to rounding.

Source: U.S. Bureau of the Census, Current Population Survey

In 2018, half (50 percent) of Pennsylvanians who earned the minimum wage or less worked in

food preparation & serving related occupations. Another 14 percent of Pennsylvanians who

earned the minimum wage or less were employed in sales & related occupations. From 2018 to

2023, the proportion of Pennsylvania minimum wage or below earners who worked in food

preparation & serving related occupations increased by 19 percentage points even as it declined

by 33 percent on an absolute level. Sales & related occupations decreased by 8 percentage

points, which was the second largest relative decrease behind office & administrative support

occupations, which fell by 9 percentage points.

The occupational categories whose percentage of minimum wage or below earners increased

the most over the five-year interval besides food preparation & serving related occupations

(which rose by 19 percentage points) were construction & extraction (6 percentage points) and

farming, fishing & forestry (4 percentage points). Legal occupations (which increased by 2

percentage points) was the only other occupational category with an increased percentage over

the interval. These three occupational categories had no minimum wage or below

representation in 2018.

The relative changes from 2022 to 2023 were similar to the changes over the five-year period.

Two examples of this were in the occupational categories with the largest percentage point

increases and decreases. Food preparation & serving related occupations had the largest

percentage increase over the year (18 percentage points) and over the 5-year period (19

percentage points). Similarly, the occupational category with the largest percentage point

decrease was the office & administrative support occupations, which decreased by 11

percentage points from 2022 and by 9 percentage points from 2018.

Minimum Wage Report 25

Pennsylvania Family Status and Family Income Characteristics of Workers

Paid Hourly Rates At or Below the Minimum Wage

Comparison of 2023, 2022, and 2018

Characteristic

2018

2022

2023

Percentage

Point Change

PA

1

PA

1

PA

1

2018 to 2023

2022 to 2023

TOTAL (in thousands)

96.3

63.6

67.8

-

Family Status

2

(in Percent)

No Children (Single or Married)

84%

93%

94%

10%

1%

Married Parent

6%

0%

3%

-2%

3%

Single Parent

11%

7%

3%

-8%

-4%

1 child

3%

2%

3%

0%

2 children

5%

0%

-5%

0%

3 children

3%

4%

0%

-3%

-4%

4 or more children

0%

Family Annual Income (in Percent)

$9,999 or less

8%

11%

7%

-1%

-4%

$10,000 to $19,999

18%

7%

6%

-12%

-1%

$20,000 to $29,999

14%

11%

0%

-14%

-11%

$30,000 to $39,999

2%

11%

9%

8%

-2%

$40,000 to $49,999

12%

0%

5%

-7%

5%

$50,000 to $59,999

6%

8%

10%

4%

3%

$60,000 To $74,999

11%

18%

7%

1%

$75,000 To $99,999

15%

13%

8%

-7%

-5%

$100,000 To $149,999

9%

14%

0%

-9%

-14%

$150,000 and Over

5%

9%

36%

32%

28%

1

The PA minimum wage in 2018, 2022, and 2023 was $7.25.

2

Classification of an individual as a parent requires having at least one own child under the age of 18. All references to children also refer to own children under the age of 18.

Totals in the table are rounded to the nearest percent and may differ from those in the text and may not sum correctly due to rounding.

Source: U.S. Bureau of the Census, Current Population Survey

The biggest change in family composition of minimum wage or below workers from 2018 to

2023 was the increase (10 percentage points) in the percentage of those without children and

an almost equal decrease in the percentage of single parents (8 percentage points). The

decrease in the percentage of single parents was due to a lack of single parents with more than

one child, as the percentage with one child was unchanged. From 2018 to 2022, the percentage

of single parents decreased by 4 percentage points and decreased by another 4 percentage

points from 2022 to 2023.

On a relative basis, the distribution of family income of minimum wage and below workers

shifted from the lowest incomes (under $30,000) and to incomes in excess of $149,999 over the

last five years. From 2018 to 2023, the percentage of minimum wage or below workers whose

family income was less than $30,000 decreased by 27 percentage points to 12 percent, and a

decrease of 16 percentage points from 2022. At the same time, the percentage of such workers

with family income of at least $150,000 was 36 percent, which was 28 percentage points higher

than in 2022 and 32 percentage points higher than in 2018. The family income cohort with family

income from $75,000 to $149,000 fell by 16 percentage points compared to five years prior and

decreased by 18 percentage points compared to 2022.

Given the relatively small CPS sample size of total minimum wage or below workers, the smaller

subsamples for some of the characteristics above can lead to volatility in making comparisons

over time. Therefore, it is difficult to determine whether these results are simply statistical

anomalies due to small sample sizes or reflect actual changes in the composition of the

minimum wage and below population or some combination thereof.

Minimum Wage Report

26

Minimum Wage Report 27

HISTORICAL PERSPECTIVE:

MINIMUM WAGE IN RELATION TO

INFLATION AND THE POVERTY

THRESHOLD

Minimum Wage Report

28

The Average Wage forecast was based on its 10-year arithmetiv average.

The minimum wage in 2022 (and 2023) was $7.25.

The original level of the minimum wage was set in 1938 at 25 cents, which was 50 percent of

the national average manufacturing wage at that time. According to Jonathan Grossman, a

Department of Labor historian, “…, The act applied only to interstate commerce and to

accommodate various interests, exemption after exemption was granted. A ‘guesstimate’

1

is that

one fifth of the American labor force,…were covered by the FLSA.”

2

Over time, as the coverage

of the minimum wage expanded and manufacturing employment declined as a percentage of

total employment, the statewide average wage replaced the average manufacturing wage as the

relevant comparison wage, as shown in the above chart. Adjusted for projected wage inflation

using its 10-year average, 50 percent of the average wage was $16.10 in 2022. It is projected

to rise to $16.64 in 2023, $17.21 in 2024, and $17.79 in 2025.

A gradual decline in the minimum wage as a percentage of the Pennsylvania’s average wage

began in 1968. By 2006, Pennsylvania’s minimum wage was 26 percent of the average wage.

This was the all-time low since this information first was documented in 1938 through 2019.

The increase in the minimum wage to $7.25 in July 2009 brought the minimum wage up to 34

percent of the average wage. In 2022, Pennsylvania’s minimum wage was 23 percent of the

average wage, a new all-time low. If the minimum wage stays at its current level and the average

wage grows at its projected 10-year average rate, the minimum wage will continue to drop to 22

percent of the average Pennsylvania wage by 2023, 21 percent in 2024, and to 20 percent by

2025.

1

Data on the estimated number covered was reported in The Twenty-Seventh Annual Report of the Secretary of Labor (1939),

as of September 1938 (p.198). The section on coverage of the act begins, “It will not be possible to prepare completely accurate

estimates of the number of employees who are covered by the act …” Later it states that the BLS estimated the coverage six

months later and it was 1.45 million (18%), higher. Furthermore, it was well known that inter census labor force numbers prior

to 1940 (when the CPS (predecessor) began), were not comparable (conceptually and by the fact that they included people 14

years and older) and that data on unemployment may not be accurate. These facts may have led Grossman to characterize the

ratio as a ‘guesstimate.’

2

Grossman, Jonathan, “Fair Labor Standards Act of 1938: maximum struggle for a minimum wage,” Monthly Labor Review,

June 1978 p. 29. Grossman begins that paragraph with, “A major problem with the FLSA was its limited coverage.” This attitude

may explain why he compared coverage with the labor force rather than employment, particularly in a year when the

unemployment rate was 19%. That would make the cover ratio lower. Not all employees in industries engaged in or producing

goods for interstate commerce were covered. Among the exemptions were interstate retailing enterprises, non-railroad

transportation workers, and agriculture.

0

10

20

30

40

50

60

1938

1941

1944

1947

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

2016

2019

2022

2025

Percent of Average Hourly Wage

Pennsylvania's Minimum Wage as a Percent of Pennsylvania's

Average Wage: 1938-2025

Forecast

Minimum Wage Report 29

1

Indexed to 2023 dollars.

The inflation forecast was based on its 10-year arithmetic average applied to the minimum wage.

The minimum wage in 2023 was $7.25.

Inflation adversely affects the purchasing power of an unchanging minimum wage. The inflation

adjusted or real minimum wage increases when the percentage increase in the nominal

minimum wage exceeds the (price) inflation rate and decreases when the reverse is true. All the

peaks in the graph above correspond to years in which the nominal minimum wage was

increased. In the remaining years, the minimum wage was unchanged, but the real minimum

wage fell as prices rose. Similarly, if the nominal minimum wage remains at $7.25, the value of

the minimum wage as adjusted for projected inflation is estimated to fall to $7.06 in 2024 and

$6.87 in 2025.

The 1938 minimum wage of $0.25 would have been equivalent in purchasing power to $5.40 in

2023 dollars. The minimum wage was raised to $0.30 in 1939 and to $0.40 in 1945 causing its

purchasing power to increase. However, the post-war inflation that followed caused the

purchasing power of the minimum wage (still $0.40) to fall to its all-time low of $5.06 in 1948.

In 1968, the year in which the purchasing power of the minimum wage peaked, the then-current

nominal minimum wage of $1.60 was equivalent to $14.01 in 2023 dollars. Pennsylvania’s

minimum wage remained unchanged from September of 1997 to the end of 2006, while prices

rose considerably. As the above graph indicates, in 2006 the purchasing power of the minimum

wage was less than at any time since the 1950s. In 2009, the last year in which the minimum

wage increased, the purchasing power of the minimum wage was $10.30 (in 2023 dollars) and

has been steadily declining since then.

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

1938

1941

1944

1947

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

2016

2019

2022

2025

Dollars

Pennsylvania

Real (Inflation Adjusted) and Nominal Minimum Wage Rates

1

1938-2025

Real Minimum Wage Nominal Minimum Wage

Forecast

Minimum Wage Report

30

1

Weighted average threshold (there are slight variations based on the breakdown between adults and children in the household)

The inflation forecast was based on its 10-year average applied to the poverty threshold.

Source: U.S. Bureau of the Census

The Census annually sets poverty thresholds for families that vary by family size and the ages

of its members. Each threshold is a monetary sum that is compared to the family’s income to

determine the poverty status of all the members of that family

3

. Family income is pre-tax and

includes earnings, unemployment compensation, public assistance, and a variety of other

unearned income and transfer payments, but excludes capital gains, noncash benefits (e.g.,

food stamps), and tax credits (e.g., Earned Income Tax Credit or EITC). To provide perspective

on the relation between the minimum wage and poverty, hypothetical examples are constructed

and illustrated below and on the following page.

The 2006 Federal Poverty Threshold (see glossary) for a two-person household was $13,167

and the annual income for an individual working full time

4

at the minimum wage (then $5.15)

was $10,712 or 81 percent of the poverty threshold. The two 2007 increases in the minimum

wage (cumulatively to $7.15) raised the corresponding annual income at year end to $14,872,

which was almost 110% of the poverty threshold.

In 2022, the annual income for an individual in Pennsylvania making the minimum wage ($7.25)

was $15,080 or 79.8 percent of the 2022 Federal Poverty Threshold for a two-person household

($18,900).

3

Poverty thresholds are used mainly for statistical purposes. Poverty guidelines, which are a simplification of poverty thresholds, are issued by

the U.S. Department of Health and Human Services for use for administrative purposes, e.g., determining eligibility for federal programs. Go to

this link for more information: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/further-resources-poverty-measurement-

poverty-lines-their-history.

4

Full time in this context (in contrast to the BLS definition used to determine the number of full-time workers) means working 52 weeks per year

and 40 hours per week.

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

160%

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Pennsylvania

Minimum Wage as Percent of Federal Poverty Threshold, 2 Persons

1

1959-2025

Forecast

Minimum Wage Report 31

1

Weighted average threshold (there are slight variations based on the breakdown between adults and children in the household)

Source: U.S. Bureau of the Census

A person working full time at the minimum wage of $7.25 per hour earned $15,080 (represented

by the bold line on the graph) during 2022. This income exceeded the 2022 Federal Poverty

Threshold for a one-person household ($14,880). However, it fell short of the poverty threshold

for two-person ($18,900) and three-person households ($23,280).

A single, two-children parent working full time at $7.25 per hour would earn wages below the

applicable poverty threshold. However, a two-parent, two-child family with both parents working

full time at the minimum wage would earn $30,160 (the bold dashed line on the graph) and would

exceed the poverty threshold for a four-person household ($29,950).

5

Families of minimum wage or below workers who are below the poverty threshold may be eligible

to participate in state and federal government programs designed to assist low-income families.

A description of some of these major programs is found in the Appendix on page 42.

5

These examples are for illustration purposes only and are not representative of the majority of minimum wage earners, although they

may reflect the situation of some families. As pointed out earlier, a large percentage of minimum wage earners work fewer than 35 hours

a week and would earn less than $15,080 per year.

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

1 2 3 4 5 6

Annual Income

People in Family

2022 Federal Poverty Threshold by Family Size

1

Compared with

Pennsylvania Minimum Wage Level

Annual income of 1 full-time worker

earning $7.25 Minimum Wage

Annual income of 2 full-time workers

earning $7.25 Minimum Wage

Minimum Wage Report

32

Minimum Wage Report 33

OTHER STATES

Minimum Wage Report

34

Minimum Wage Rates by State

Area

2022

2023

2024

Change

2022-

2023

Change

2023-

2024

Area

2022

2023

2024

Change

2022-

2023

Change

2023-

2024

Federal

$7.25

-

Federal

$7.25

-

Alabama

$7.25

-

Montana

1

$9.20

$9.95

$10.30

$0.75

$0.35

Alaska

1

$10.34

$10.85

$11.73

$0.51

$0.88

Nebraska

1

$9.00

$10.50

$12.00

$1.50

Arizona

1

$12.80

$13.85

$14.35

$1.05

$0.50

Nevada

1

$10.50

$11.25

$12.00

$0.75

Arkansas

$11.00

-

New Hampshire

$7.25

-

California

1

$15.00

$15.50

$16.00

$0.50

New Jersey

1

$13.00

$14.13

$15.13

$1.13

$1.00

Colorado

1

$12.56

$13.65

$14.42

$1.09

$0.77

New Mexico

$11.50

$12.00

$0.50

-

Connecticut

1

$14.00

$15.00

$15.69

$1.00

$0.69

New York

1

$14.20

$15.00

-

$0.80

Delaware

$10.50

$11.75

$13.25

$1.25

$1.50

North Carolina

$7.25

-

Florida

1

$11.00

$12.00

$13.00

$1.00

North Dakota

$7.25

-

Georgia

$7.25

-

Ohio

1

$9.30

$10.10

$10.45

$0.80

$0.35

Hawaii

$12.00

$14.00

-

$2.00

Oklahoma

$7.25

-

Idaho

$7.25

-

Oregon

1

$13.50

$14.20

TBD

$0.70

TBD

Illinois

$12.00

$13.00

$14.00

$1.00

Pennsylvania

$7.25

-

Indiana

$7.25

-

Rhode Island

$12.25

$13.00

$14.00

$0.75

$1.00

Iowa

$7.25

-

South Carolina

$7.25

-

Kansas

$7.25

-

South Dakota

1

$9.95

$10.80

$11.20

$0.85

$0.40

Kentucky

$7.25

-

Tennessee

$7.25

-

Louisiana

$7.25

-

Texas

$7.25

-

Maine

1

$12.75

$13.80

$14.15

$1.05

$0.35

Utah

$7.25

-

Maryland

$12.50

$13.25

$15.00

$0.75

$1.75

Vermont

1

$12.55

$13.18

$13.67

$0.63

$0.49

Massachusetts

$14.25

$15.00

$0.75

-

Virginia

$11.00

$12.00

$1.00

-

Michigan

$9.87

$10.10

$10.33

$0.23

Washington

1

$14.49

$15.74

$16.28

$1.25

$0.54

Minnesota

1

$10.33

$10.59

$10.85

$0.26

West Virginia

$8.75

-

Mississippi

$7.25

-

Wisconsin

$7.25

-

Missouri

1

$11.15

$12.00

$12.30

$0.85

$0.30

Wyoming

$7.25

-

1

Minimum wage change tied to inflation rate of the Consumer Price Index (CPI), or a similar measure).

The data for 2024 (which includes enacted, but not yet effective statutory increases) was accurate as of January 10, 2024. Some states have multiple minimum wage

rates due to type of work or number of employees, while others are based on geography. The highest rate is used above for non-geographic rates, while for geographic

ones those applicable to most of the state are used. All data are as of year-end.

Data for the Federal government and states that abut Pennsylvania are shaded in gray.

Source: U.S. Department of Labor and state websites

Since 2015, the number of states setting higher minimum wage rates than Pennsylvania was

essentially static, except for Virginia, which became the 30

th

state to set a minimum wage rate

above Pennsylvania’s on May 1, 2021. During 2023, the minimum wage rates in states that

exceeded Pennsylvania’s ranged from $8.75 to $15.74. All of Pennsylvania’s neighboring states

have had minimum wages that exceeded Pennsylvania’s since the beginning of 2015. In 2023,

they ranged from $8.75 to $14.20 and for 2024, they are projected to range from $8.75 to $15.13.

In 2023 there were four states with minimum wage rates of at least $15.00. An additional three

states, all of which abut Pennsylvania, are projected to join them in 2024. Most of the states with

minimum wages higher than Pennsylvania’s tie changes in their minimum wage rates to inflation

rates of the Consumer Price Index or other similar measures to provide automatic increases that

keep pace with inflation. Some states have provisions that forgo increases if the unemployment

rate is high (e.g., Michigan recently in 2021) or when the Consumer Price Index falls (e.g., Alaska

recently in 2022). In addition, some state provisions allow for local minimum wage rates to be

set higher than the state rate overall, based on the municipality, industry, size of employer, and

so forth. These higher rates are not reflected in the table above which uses the general minimum

wage rate in the state.

Twenty-six states raised their minimum wage rates in 2023, and rates are scheduled to rise in

twenty-five states by the end of 2024.

Minimum Wage Report 35

Tipped Minimum Wage Rates by State

Area

2022

2023

2024

Change

2022-

2023

Change

2023-

2024

Area

2022

2023

2024

Change

2022-

2023

Change

2023-

2024

Federal

$2.13

-

Federal

$2.13

-

Alabama

$2.13

-

Montana

1

$9.20

$9.95

$10.30

$0.75

$0.35

Alaska

1

$10.34

$10.85

$11.73

$0.51

$0.88

Nebraska

1

$2.13

-

Arizona

1

$9.80

$10.85

$11.35

$1.05

$0.50

Nevada

1

$10.50

$11.25

$12.00

$0.75

Arkansas

$2.63

-

New Hampshire

$3.27

-

California

1

$15.00

$15.50

$16.00

$0.50

New Jersey

1

$5.13

$5.26

$0.13

-

Colorado

1

$9.54

$10.63

$11.40

$1.09

$0.77

New Mexico

$2.80

$3.00

$0.20

-

Connecticut

1

$6.38

-

New York

1

$9.45

$10.00

-

Delaware

$2.23

-

North Carolina

$2.13

-

Florida

1

$7.98

$8.98

$9.98

$1.00

North Dakota

$4.86

-

Georgia

$2.13

-

Ohio

1

$4.65

$5.05

$5.25

$0.40

$0.20

Hawaii

$12.00

$14.00

-

$2.00

Oklahoma

$2.13

-

Idaho

$3.35

-

Oregon

1

$13.50

$14.20

$14.90

$0.70

Illinois

$7.20

$7.80

$8.40

$0.60

Pennsylvania

$2.83

-

Indiana

$2.13

-

Rhode Island

$3.89

-

Iowa

$4.35

-

South Carolina

$2.13

-

Kansas

$2.13

-

South Dakota

1

$4.98

$5.40

$5.60

$0.42

$0.20

Kentucky

$2.13

-

Tennessee

$2.13

-

Louisiana

$2.13

-

Texas

$2.13

-

Maine

1

$6.38

$6.90

$7.08

$0.52

$0.18

Utah

$2.13

-

Maryland

$3.63

-

Vermont

1

$6.28

$6.59

$6.84

$0.31

$0.25

Massachusetts

$6.15

$6.75

$0.60

-

Virginia

$2.13

-

Michigan

$3.75

$3.84

$3.93

$0.09

Washington

1

$14.49

$15.74

$16.28

$1.25

$0.54

Minnesota

1

$10.33

$10.59

$10.85

$0.26

West Virginia

$2.62

-

Mississippi

$2.13

-

Wisconsin

$2.33

-

Missouri

1

$5.58

$6.00

$6.15

$0.42

$0.15

Wyoming

$2.13

-

1

Tipped minimum wage equals the state’s minimum wage.

2

Oklahoma’s tipped minimum wage equals 50% of the state’s minimum wage, but is shown as $2.13 because all FLSA covered employees are excluded. Note: The

data for 2024 (which includes enacted, but not yet effective statutory increases) was accurate as of January 3, 2024. All data are as of year-end. Data for the Federal

government and states that abut Pennsylvania are shaded in gray. Source: U.S. Department of Labor and state websites.

Many states and the federal government allow employers to pay a cash wage lower than the

minimum wage for tipped employees. These laws require that the sum of the direct cash

payment and the tipped amount must at least equal the full minimum wage. States vary regarding

which employees are covered and many differentiate their rates based on the number of

employees in the firm and/or by geography.

The tipped minimum wage in Pennsylvania has been $2.83 since 1997. In 2023, New Mexico

raised its tipped minimum wage from $2.80 to $3.00, becoming the twenty-ninth state with a

higher tipped minimum wage rate than Pennsylvania with rates ranging from $3.00 to $15.74.

Seven of those states do not have a tip credit making their tipped minimum wages equal to their

full minimum wages. Hawaii has a tip credit only when the total of the tips plus wages exceeds

the minimum wage by $7.00 per hour; otherwise, the the employer cannot pay a cash wage

below the full minimum wage to the tipped worker.

The federal tipped minimum wage has been at $2.13 since 1991. Sixteen states had their tipped

minimum wage rates equal to the federal level during 2023, while another four states had a

tipped minimum wage above the federal level, yet below Pennsylvania’s $2.83. The tipped

minimum wages in all of Pennsylvania’s six neighboring states exceed the federal level. In 2023,

four of those states had higher rates than Pennsylvania and two were below.

The tipped minimum wage was raised in 20 states during 2023 and has already been increased

- or is projected to do so by year-end 2024 - in 18 states.

Minimum Wage Report

36

Minimum Wage Report 37

APPENDIXES

Minimum Wage Report

38

Terms, Definitions and Sources

• Bureau of the Census – The U.S. Bureau of the Census, in the U.S. Department of

Commerce, collects general information from individuals and establishments in order to

compile statistics.

• Bureau of Labor Statistics (BLS) – The federal Bureau of Labor Statistics, in the U.S.

Department of Labor, is the principal fact-finding agency for the Federal Government in

the broad field of labor economics and statistics.

• Census – A census is an enumeration of the population of a nation or a registration

region; a systematic and complete count of all who are living in specified places, usually

on a specific date. Like many modern democracies, the United States conducts a

complete enumeration every 10 years, under the auspices of the U.S. Bureau of the

Census, which publishes detailed reports.

• Consumer Price Index (CPI) – Monthly data on changes in the prices paid by urban

consumers for a representative basket of goods and services. BLS produces the CPI.

• Cost of Living Adjustment (COLA) – Adjustment of wages designed to offset changes in

the cost of living, usually as measured by the Consumer Price Index.

• Current Population Survey (CPS) – The CPS is a statistical survey conducted by the U.S.

Bureau of the Census on behalf of the federal Bureau of Labor Statistics (BLS). BLS uses

the data to provide a monthly report on the national employment situation including

employment, unemployment, labor force and the unemployment rate.

• Employed – A count of persons (not jobs) who, during the week that includes the 12th

day of the month: (a) did any work as paid employees; worked in their own business or

profession or on their own farm or worked 15 hours or more as unpaid workers in

enterprises operated by members of their families; or (b) were not working, but who had

jobs from which they were temporarily absent. Current Population Survey estimates of

the employed (as in this report) can differ from the official statistics of Pennsylvania’s

employed persons, which come from the Local Area Unemployment Statistics.

• Fair Minimum Wage Act of 2007 – The act amended the Fair Labor Standards Act of

1938 to increase the federal minimum wage by $2.10 over two years – from $5.15 to

$7.25 an hour. On July 24, 2007, the minimum wage increased from $5.15 to $5.85. On

July 24, 2008, the minimum wage increased from $5.85 to $6.55. On July 24, 2009, the

final increase occurred from $6.55 to $7.25.

• Federal Poverty Threshold – The set minimum amount of annual income that a family

needs for food, clothing, transportation, shelter, and other necessities as determined by

the U.S. Bureau of the Census. The U.S. Bureau of the Census uses a set of annual

money income thresholds that vary by family size and composition to determine who is in

poverty. Every member of a family is deemed to be in poverty if the family’s total income

is less than the applicable threshold. The calculation of family income includes before tax

income from earnings, unearned income (interest, dividends, rents, etc.), and cash

transfer payments (unemployment compensation, Social Security, SSI, public assistance,

etc.), but excludes capital gains and losses, tax credits (e.g., EITC), and noncash

benefits (e.g., food stamps). The number is adjusted for inflation and reported annually.

Minimum Wage Report 39

• Fair Labor Standards Act (FLSA) – Passed by the U.S. Congress in 1938 to establish

minimum wage rates for workers engaged directly or indirectly in interstate commerce,

including those involved in production of goods bound for such commerce. In addition to

establishing a minimum wage, it also established a maximum workweek, overtime pay,

record keeping requirements, and child labor standards affecting full-time and part-time

workers in the private sector and in federal, state, and local governments.

• Inflation – Inflation is a sustained increase in the general price level of goods and

services in an economy over some period of time. Equivalently, it also represents a

decreasing value of the country’s money. The inflation rate is the annualized percentage

change in some price index. The Consumer Price Index (CPI) is a commonly used

standard to measure inflation since it measures the average change over time of the

prices paid by urban consumers for a market basket of consumer goods and services.

• Minimum Wage – Minimum wage is the lowest lawful hourly level at which workers may

be compensated by their employers; it is established by the FLSA at the federal level and

by the Minimum Wage Act in Pennsylvania.

• National Bureau of Economic Research (NBER) – The NBER is the nation's leading

nonprofit economic research organization. Due to its work on national accounts and

business cycles, the NBER is well-known for providing start and end dates for recessions

in the United States.

• Near Minimum Wage – A range of wage rates somewhat in excess of the legal minimum

wage, but close to it. In addition to those earning at or below the minimum wage, the

group most likely to be affected by an increase in the minimum wage are those earning

the near minimum wage. For purposes of this report, wage rates between $7.26 and

$12.00 per hour are referred to as the near minimum wage.

• Tipped Minimum Wage – Labor law in many states (including Pennsylvania) as well as

federal law allows employers of tipped workers (variously defined) to take a “tip credit”

that lowers the mandated cash minimum wage below that of the actual mandated

minimum wage if the combined cash and tip income is at least equal to the full minimum

wage. The mandated hourly direct cash payment for these workers is usually referred to

as the tipped minimum wage.

• Wage and Salary Workers – These are workers aged 16 and older who receive wages,

salaries, commissions, tips, payments in kind, or piece rates on their sole or principal job.

This group includes employees in both the private and public sectors, as well as both

hourly and non-hourly workers. All self-employed workers are excluded whether or not

their businesses are incorporated.

• Workers Paid by the Hour (Hourly Workers) – These are employed wage and salary

workers who report that they are paid at an hourly rate on their job. Historically, workers

paid an hourly wage have made up approximately three-fifths of all wage and salary

workers nationally. Estimates of workers paid by the hour include both full- and part-time

workers unless otherwise specified.

Minimum Wage Report

40

Table of Industry Distributions

A Comparison of Industry Distributions of Various Populations

Pennsylvania and U.S.: 2023 Averages

(total numbers of workers in thousands, breakdown by industry in percent)

Industry Characteristics of Hourly Wage & Salary

Workers at the Minimum Wage or Below

Minimum Wage or Below

Above Minimum Wage

Near

Total

PA

1

U.S.

1

PA

TOTAL

67.8

870

335.1

3,168.2

Industry

Accommodation

0%

2%

3%

1%

Agriculture, forestry, fishing, and hunting

4%

0%

1%

Arts, entertainment, and recreation

3%

8%

2%

Construction

6%

2%

1%

6%

Educational services

0%

3%

6%

Financial activities

0%

1%

2%

4%

Food services and drinking places

66%

65%

21%

7%

Health care services, except hospitals

3%

2%

10%

11%

Hospitals

3%

1%

7%

Information

0%

1%

0%

1%

Manufacturing

4%

3%

5%

12%

Mining

0%

Other services

6%

3%

6%

4%

Professional and business services

2%

3%

7%

Public administration

0%

2%

1%

4%

Retail trade

3%

5%

26%

14%

Social assistance

0%

2%

4%

3%

Transportation and utilities

0%

3%

8%

Wholesale trade

0%

2%

Work Status

Full-time

54%

55%

32%

76%

Part-time

46%

45%

68%

24%

1

Both the U.S. minimum wage and the PA minimum wage were $7.25 during 2023

Totals may not sum due to rounding

Source: U.S. Bureau of the Census, Current Population Survey

Minimum Wage Report 41

Table of Occupational Distributions

A Comparison of Occupational Distributions of Various Populations

Pennsylvania and U.S.: 2023 Averages

(total numbers of workers in thousands, breakdown by occupation in percent)

Occupation

Minimum Wage or Below

Above Minimum Wage

Near

Total

PA

1

U.S.

1

PA

TOTAL

67.8

870

335.1

3,168.2

Occupation

Architecture & Engineering

0%

1%

Arts, Design, Entertainment, Sports & Media

0%

1%

Building, Grounds Cleaning & Maintenance

0%

2%

5%

3%

Business & Financial Operations

0%

1%

3%

Community & Social Service

0%

1%

2%

Computer & Mathematical Science

0%

1%

2%

Construction & Extraction

6%

1%

0%

5%

Education, Training & Library

0%

1%

2%

3%

Farming, Fishing & Forestry

4%

0%

1%

Food Preparation & Serving Related

69%

66%

22%

7%

Healthcare Practitioner & Technical

0%

1%

2%

8%

Healthcare Support

3%

4%

6%

7%

Installation, Maintenance & Repair

0%

4%

Legal

2%

0%

1%

Life, Physical & Social Service

0%

1%

Management

0%

2%

4%

Office & Administrative Support

2%

3%

13%

Personal Care & Service

3%

4%

6%

2%

Production

0%

2%

5%

8%

Protective Service

0%

2%

3%

Sales & Related

6%

4%

19%

9%

Transportation & Material Moving

5%

4%

11%

13%

1

Both the U.S. minimum wage and the PA minimum wage were $7.25 during 2023

Totals may not sum due to rounding

Source: U.S. Bureau of the Census, Current Population Survey

Minimum Wage Report

42

Programs that May Assist Low Income Workers

There are a multitude

6

of state and federal programs including cash aid, education, energy, food

aid, health care, etc., that provide assistance to low-income families. Below is a brief

description of some of the major programs for which some minimum wage or below workers

may be eligible. While the requirements of each program differ, they generally have a work

requirement and are based on family characteristics and income.

Earned income Tax Credit (EITC): is a refundable federal tax credit that offsets some payroll

and income taxes of low-income working families. To qualify, one needs to file a tax return

(cannot file married, filing separately), have earned income (i.e., work), have less than $53,505

of both earned and adjusted gross income (limits are lower for less than three qualifying children

and if not filing “married filing jointly”), and no more than $3,400 in investment income. The

maximum benefit ranges from $506 (no qualifying children) to $6,269 (three or more qualifying

children).

Child Tax Credit (CTC): helps working families offset the cost of raising children. Eligibility

requires one to file taxes, have at least one qualified child, and have earned income (work). The

maximum modified adjusted gross income is as high as $110,000, for married couples filing

jointly. The maximum tax credit is $1,000 for each qualified child and equals 15 percent of

earnings over $3,000. The Additional Child Tax Credit (ACTC) is a refundable component of the

CTC.

Pennsylvania - Temporary Assistance for Needy Families (TANF): is a federal program

administered through the state via a block grant and is designed to help needy families achieve

self-sufficiency. It is also referred to as Cash Assistance. There are both resource and income

constraints as well as a maximum time limit (60 months) that one can access these benefits.

Supplemental Nutrition Assistance Program (SNAP): was formerly known as the Food

Stamp program. These benefits are used to buy food and help eligible low-income households

in Pennsylvania obtain more nutritious diets by increasing their food purchasing power at

grocery stores and supermarkets. There are gross monthly income limits based on family size

and presence of disabled persons.

Medicaid / Medical Assistance (MA): pays for health care services for eligible individuals.

Income limits are based on a multiple of the Federal Poverty Guidelines, which depends on

family size and composition.

More detailed information on these programs can be found at:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/do-i-qualify-for-

earned-income-tax-credit-eitc

https://www.irs.gov/pub/irs-pdf/p972.pdf

https://www.dhs.pa.gov/Services/Assistance/Pages/TANF.aspx

https://www.dhs.pa.gov/Services/Assistance/Pages/SNAP.aspx

https://www.dhs.pa.gov/Services/Assistance/Pages/Medical-Assistance.aspx

6

In FY 2012, there were at least 92 federal programs that were designed to help lower-income Americans,

according to, The War on Poverty: 50 Years Later, March 3, 2014, by the House Budget Committee Majority Staff.

Minimum Wage Report 43

Minimum Wage Changes: Pennsylvania

7

and the U.S.

8

Effective

Date of Rate

Change

Federal Minimum Wage

Rates Under FLSA of

1938 (as amended)

Pennsylvania Minimum Wage

Rates Under Minimum Wage

Act of 1968 (as amended)

Effective

Pennsylvania

Minimum Wage

Rate

Oct 24,1938

$0.25

Oct 24,1939

$0.30

Oct 24,1945

$0.40

Jan 25,1950

$0.75

Mar 1,1956

$1.00

Sep 3,1961

$1.15

Sep 3,1963

$1.25

Feb 1,1967

$1.40

Feb 1,1968

$1.60

May 1,1974

$2.00

Jan 1,1975

$2.10

Jan 1,1976

$2.30

Jan 1,1978

$2.65

Jan 1,1979

$2.90

Jan 1,1980

$3.10

Jan 1,1981

$3.35

Feb 1,1989

$3.70

Apr 1,1990

$3.80

Apr 1,1991

$4.25

Oct 1,1996

$4.75

Sep 1,1997

$5.15

Jan 1,2007

$6.25

Jul 1,2007

$7.15

Jul 24,2007

$5.85

$7.15

Jul 24,2008

$6.55

$7.15

Jul 24,2009

$7.25

7

Source: Minimum Wage Act of 1968 (as amended, see Section 4a),

(https://www.legis.state.pa.us/CFDOCS/LEGIS/LI/uconsCheck.cfm?txtType=HTM&yr=1968&sessInd=0&smthLwIn

d=0&act=0005.&CFID=341787833&CFTOKEN=29282704).

8

Sources: DOL Wage and Hour Division, “FEDERAL MINIMUM WAGE RATES UNDER THE FAIR LABOR

STANDARDS ACT” (https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/chart.pdf) in tabular form and a more

verbal exposition in “History of Changes to the Minimum Wage Law”

(https://www.dol.gov/whd/minwage/coverage.htm).

Minimum Wage Report

44

Both the Fair Labor Standards Act (henceforth FLSA, which governs the federal minimum wage)

and Pennsylvania’s Minimum Wage Act of 1968 (henceforth MWA) have been amended

multiple times since their initial enactments. The thrust of these amendments has not only been

to increase the minimum wage, but also to expand the coverage of workers governed by the

minimum wage. Some workers may have been exempted from these laws, while others may

have been allowed by these amendments to be paid less the “standard” minimum wage (which

is the rate listed on the previous table). Section 4 (a.1) of the MWA mandates that if the

minimum wage set by the FLSA is increased above the rate required in Section 4 of the MWA,

then the minimum wage required under Section 4 would be increased by the same amount and

with the same effective date mandated by the FLSA. Consequently, some of the rates listed as

changes in the MWA are reflecting changes mandated by the FLSA. However, since they were

listed in the current version of the statute (last amended on July 5, 2012), they are listed in the

table on page 43. For workers covered by the FLSA, whenever the FLSA mandates a higher

minimum wage than state law, federal law (e.g., FLSA) supersedes state law. Consequently, the

effective minimum wage rate in the accompanying table is the higher of the rate mandated by

the FLSA or the MWA.

CENTER FOR WORKFORCE INFORMATION & ANALYSIS

DEPARTMENT OF LABOR & INDUSTRY

651 BOAS STREET, ROOM 220

HARRISBURG, PA 17121

WWW.WORKSTATS.DLI.PA.GOV

(877) 493-3282