Frederick Floss (October 12, 2026)
New York State phased in a $15-per-hour minimum wage beginning in 2016, on different schedules for New York City, Long Island and Westchester County, and the rest of the state, while Pennsylvania’s minimum wage remained at the federal $7.25. Competitive labor market theory predicts that a binding minimum wage reduces employment, whereas monopsony theory predicts that a moderate minimum wage can raise both wages and employment. This paper asks which model better describes New York using a staggered difference-in-differences design (Callaway & Sant’Anna, 2021) with Pennsylvania as the never-treated comparison group. The analysis uses county-level Quarterly Census of Employment and Wages data for 129 counties from 2011 to 2025, with independent checks using Current Population Survey microdata and Occupational Employment and Wage Statistics data. The minimum wage increases raised wages, particularly in hospitality, while estimated effects on total employment were not statistically significant. The one significant hospitality employment estimate, about 121 jobs per county in the rest of the state, is economically very small. A border-county comparison and distributional evidence point to the same conclusion: wages in New York rose in real terms while wages in Pennsylvania stagnated, without a major decline in employment. These findings are more consistent with the monopsony model.
Keywords: minimum wage, difference-in-differences, monopsony, employment, New York
