Thread: Percentage of minimum wage workers in the US?

I picked 8%.

-dale

I picked 2%

I'm a pessimist, I voted 20%

I went with 14% although I wouldn't be surprised if it was as high as 20%. I believe the average wage has been on a decline for some time now.

without revealing the actual numbers of minwage workers here are some more facts about the minimum wage.

Over half of these workers are the primary source of income for thier families.

Minorities make up a larger proportion of these workers than they represent in the general population.

79% of minimum wage workers are 20 or older

Women are the largest group of beneficiaries from a minimum wage increase: 59% of workers who would benefit from an increase to $7.25 by 2009 are women. An estimated 12% of working women would benefit directly from that increase in the minimum wage.

Relatively large shares of the workforce (up to 19.1%) in some Southern and Mid-Western states would benefit from an increase to $7.25.

Wage inequality has been increasing, in part, because of the declining real value of the minimum wage. Today, the minimum wage is 31% of the average hourly wage of American workers, the lowest level since the end of World War II.

5.15 today adjusted for inflation is only worth 3.95 lower than than old 4.25 hourly minimum (96-97)

A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).

Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment.

New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.

Sources
Appelbaum, Eileen, et al. 2004. The Minimum Wage and Working Women.Adobe Acrobat (PDF)

Bernstein, Jared, and Chauna Brocht. 2000. The Next Step: The New Minimum Wage Proposals and the Old Opposition. Washington, D.C.: Economic Policy Institute.

Bernstein, Jared, and John Schmitt. 1998 Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase. Washington, D.C.: Economic Policy Institute.

Bernstein, Jared, and Isaac Shapiro. 2006. Buying Power of Minimum Wage at 51-Year Low. Washington, D.C.: Economic Policy Institute.

Bernstein, Jared, Heidi Hartmann, and John Schmitt. 1999. The Minimum Wage Increase: A Working Woman's Issue. Washington, D.C.: Economic Policy Institute.

Card, David. 1992. Using regional variation in wages to measure the effects of the federal minimum wage. Industrial and Labor Relations Review. Vol. 46, No. 1, pp. 22-37.

Card, David, and Alan B. Krueger. 1994. Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania. American Economic Review. Vol. 84. No. 4. pp. 772-93.

Card, David, and Alan B. Krueger. 1995. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, N.J.: Princeton University Press.

Card, David, and Alan B. Krueger. 2000. Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania: reply. American Economic Review. Vol. 90, No. 5, pp. 1397-1420.

Chasanov, Amy. 2004. No Longer Getting By: An Increase in the Minimum Wage Is Long Overdue. Washington, D.C.: Economic Policy Institute.

EPI. 2000, 2005. EPI Datazone.

Fiscal Policy Institute. 2004. State Minimum Wages and Employment in Small Business. Available at Fiscal Policy Institute - Home Page.

Fortin and Lemiuex. 1996. As cited in Mishel, Lawrence, Jared Bernstein, and John Schmitt. The State of Working America 1998-99. Washington, D.C.: Economic Policy Institute.

Rasell , Edith, Jared Bernstein, and Heather Boushey. 2000. Step Up, Not Out: The Case for Raising the Federal Minimum Wage for Workers in Every State. Washington, D.C.: Economic Policy Institute.

Sawhill , Isabel, and Adam Thomas. 2001. "A Hand Up for the Bottom Third." Washington, D.C.: The Brookings Institution.

Thompson, Jeff. 1999. Oregon 's Increasing Minimum Wage Brings Raises to Former Welfare Recipients and Other Low-Wage Workers Without Job Losses. Oregon Center for Public Policy.

Placing a floor on the price of labor instantly decreases the value of all labor.

-dale

2%

Whoa wait a second...

What percentage of hourly wage earners made the Federal minimum wage or less in 2006?

is not the same as

Percentage of minimum wage workers in the US?

I would say 8% for the first question and 2% for overall working population.

Originally Posted by gunnut

2%

Whoa wait a second...

What percentage of hourly wage earners made the Federal minimum wage or less in 2006?

is not the same as

Percentage of minimum wage workers in the US?

I would say 8% for the first question and 2% for overall working population.

Good spotting. I voted 8%, and by that I meant % of all workers.

Since I'll be busy most of tomorrow, I'll go ahead and post the data.

Of the 76.5 million workers paid at hourly rates (representing 59.7% of all workers in the US), 1.7 million, or 2.2% reported being paid at or below the Federal minimum wage level. Included in this figure are those in the "leisure and hospitality" industry, which claims 63.1% of all employees working at or below the Federal minimum wage level. While not applicable to all in this industry, some earn tips and commisssions which, when added to their reported hourly wage, would put them beyond the Federal minimum wage level.

Some other key stats:

Characteristics of Minimum Wage Workers: 2006

Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and about one-fourth of workers earning at or below the minimum wage were age 16-19. Among employed teenagers, about 8 percent earned $5.15 or less. About 1 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was about 2 percent.

About 3 percent of women paid hourly rates reported wages at or below the prevailing Federal minimum, compared with under 2 percent of men.

About 2 percent of white, black, and Hispanic hourly-paid workers earned $5.15 or less. Among Asian hourly-paid workers, about 1 percent earned the Federal minimum wage or less. For whites, women were twice as likely as men to earn $5.15 or less.

Never-married workers, who tend to be young, were more likely to earn the minimum wage or less than married workers.

Part-time workers (persons who usually work less than 35 hours per week) were more likely than their full-time counterparts to be paid $5.15 or less (about 6 percent versus 1 percent).

The proportion of hourly-paid workers earning the prevailing Federal minimum wage or less has trended downward since 1979, when data first began to be collected on a regular basis.

The only jobs I've ever had that paid minimum wage were federal work study jobs. The only jobs I've ever seen that paid minimum wage are work study jobs. All the classic summer jobs I can think of pay at least 50 cents more than minimum wage. Except, of course, for tip based jobs.

Originally Posted by gunnut

2%

Whoa wait a second...

What percentage of hourly wage earners made the Federal minimum wage or less in 2006?

is not the same as

Percentage of minimum wage workers in the US?

I would say 8% for the first question and 2% for overall working population.

A good point. So with Shek's data, that means much less than 2% for the second question. Interesting.

edit: On a second look, it means 1.3% for the second question.

Originally Posted by ArmchairGeneral

The only jobs I've ever had that paid minimum wage were federal work study jobs. The only jobs I've ever seen that paid minimum wage are work study jobs. All the classic summer jobs I can think of pay at least 50 cents more than minimum wage. Except, of course, for tip based jobs.

I'm a college senior, I make $10.50/hour, more than double the minimum wage. When I get back to work, of course.

Originally Posted by zraver

without revealing the actual numbers of minwage workers here are some more facts about the minimum wage.

Over half of these workers are the primary source of income for thier families.

I checked the EPI site and couldn't source this. Can you provide me the source that EPI uses to back this claim? Their method of simply providing a source list at the end as if to say "go fish" is grossly inadequate for a think tank and makes me dubious of the rigor of their work.

In the meantime, I'll throw these stats out. Maybe I'm reading into the inference, but the impression that I feel that I should be taking away is that if the primary source of income is in a minimum wage job, then the family should be in poverty. The stats don't bear this out.

Most minimum-wage earners fall into the first category: 52 percent of those earning $5.15 or less per hour are between the ages of 16 and 24.

Only 21 percent live at or below the poverty line, while 54 percent enjoy family incomes over twice the poverty line, which is $40,000 for a family of four.

***

A few important characteristics of the 48 percent of minimum-wage earners who are over the age of 24 bear this out:

Just 20 percent live in poverty, while 37 percent have incomes over twice the poverty line.

They have an average family income of $36,300 a year, well above the poverty line of $19,806 per year for a family of four.

52% of min wage earners * 21% in poverty = 10.9%
48% of min wage earners * 20% in poverty = 9.6%

Of all min wage earners, 20.5% live in poverty. If the goal is to lift people out of poverty, then the minimum wage is NOT the way to do it. It is a blunt instrument that is not effective at this task, and there are other policy options out there that are relatively effective at getting people above the poverty line.

Originally Posted by zraver

Minorities make up a larger proportion of these workers than they represent in the general population.

This is just wrong.

http://www.heritage.org/Research/Eco...0_table_lg.gif

While Hispanics are not included, their % of the US population is 13.9%, while the BLS data has the percentage of min wage or below at 13.2%.

Originally Posted by zraver

79% of minimum wage workers are 20 or older

Wrong again. It's 74%. I know, not much of a difference, but it just goes to show above that they're using bad data.

Originally Posted by zraver

Women are the largest group of beneficiaries from a minimum wage increase: 59% of workers who would benefit from an increase to $7.25 by 2009 are women. An estimated 12% of working women would benefit directly from that increase in the minimum wage.

I guess this is trying to play on the single mother angle . . . however, just 4.1 percent of minimum-wage workers are single parents working full-time.

Originally Posted by zraver

Relatively large shares of the workforce (up to 19.1%) in some Southern and Mid-Western states would benefit from an increase to $7.25.

Cost of living is less. No surprise here.

Originally Posted by zraver

Wage inequality has been increasing, in part, because of the declining real value of the minimum wage. Today, the minimum wage is 31% of the average hourly wage of American workers, the lowest level since the end of World War II.

Actually, the main causation for this is not because of a lagging price control that dictates to two parties what an employer should value an employee at, but rather because of the increasing returns to education and the increasing productivity of the general American workforce.

Originally Posted by zraver

5.15 today adjusted for inflation is only worth 3.95 lower than than old 4.25 hourly minimum (96-97)

The data shows that employees are getting paid above and beyond the minimum wage because of supply and demand for labor in the market and that employers aren't the evil scourges that want to pay "slave wages" that many claim.

Originally Posted by zraver

A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).

Since they once again don't provide a citation or link, I can't go and critique their methodology, but considering that they were looking at data during the .com boom, which helped to fuel an expanding economy, I can't help but wonder if their results are spurious.

Originally Posted by zraver

Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment.

New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.

The Card/Krueger studies that couldn't be replicated using actual payroll data and runs counter to most of the studies out there that use a more robust methodology? You can either look at the shorter policy briefing version or the full policy study that are at this link to see why one shouldn't hang their hat on the Card/Krueger studies:

Show-Me Institute - The Economic Effects of Minimum Wages: What Might Missouri Expect from Passage of Proposition B?

Also, the "model" of higher wages that is being referred to based on the description is the efficiency wage model - however, this model revolves around the fact that a particular firm or firms pay a higher than market wage to enjoy the benefits of lower personnel costs, higher morale, etc. If you mandate an above market wage, then you don't see the same results because the worker doesn't think "Gee, I don't want Costco to fire me because otherwise, I'll have to go work at Sam's Club where they'll pay me less."

Heh...if you listen to Harry Reid and the democrats, you'd think 80% of the population in this country work for minimum wage while supporting a family of 15.