In 2020, 132.1 million wage and salary workers age 16 and older were employed in the US. Around 73.3 million were paid by the hour, of which 1.1 million workers were paid wages at or below the federal minimum of $7.25 per hour. This represents 1.5% of all hourly paid workers, a decline from 1.9% in 2019 and well below the 13.4% in 1979, when data on minimum wage workers were first collected on a regular basis.
Per the US Bureau of Labor Statistics, here are some characteristics of US workers earning hourly wages at or below the federal minimum wage in 2020:
Race and Hispanic or Latino ethnicity. About 2% of Black workers earned the federal minimum wage or less. Among White, Asian, and Hispanic workers, the percentage was about 1 percent.
Marital status. Among workers paid an hourly wage, those who were never married were more likely than married workers to earn the federal minimum wage or less (about 3% versus about 1 percent).
Industry. The leisure and hospitality industry had the highest percentage of workers earning hourly wages at or below the federal minimum wage (about 8 percent). Three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants, bars, and other food services. For many of these workers, tips may supplement the hourly wages received.
Full- and part-time status. About 4 percent of part-time workers (people who usually work fewer than 35 hours per week) were paid the federal minimum wage or less, compared with about 1 percent of full-time workers.
Age. Minimum wage workers tend to be young. Although workers under age 25 represented just under one-fifth of hourly paid workers, they made up 48% of those paid the federal minimum wage or less in 2020. Although the BLS report did not provide a more specific age breakdown for 2020, here’s one for 2019 (when the age distribution was somewhat different):
It’s difficult to know how many minimum wage workers live in poverty or near-poverty. Some live in households where others pay for their basic living expenses and they just need some extra spending money. Some are students whose parents help them out. Some work at high-end restaurants, where the tipping is generous and their true income is actually much higher than what gets reported to the IRS . Others are just starting out on a promising career path.
Assuming minimum wage workers fit the same pattern as the Brookings Institute found for low-wage workers in general, then I’d guess that about half of minimum wage workers do not live in poverty or near poverty. The rest are likely to be “primary earners or contribute substantially to family living expenses” (Ross and Bateman, 2019). These are the individuals who would benefit the most from a higher minimum wage. But even with a higher minimum wage, many of these workers would remain stuck in a low-wage rut, because they lack the skills for better-paying jobs.
The challenge for the Bold Centrist is how to help the low-skilled get on the social mobility bandwagon. Next.
References:
“Characteristics of minimum wage workers, 2020” US Bureau of Labor Statistics BLS Report 1091. February 2021
“Meet the low-wage workforce” Brookings Martha Ross and Nicole Bateman; November 7, 2019.