November 5, 2014

Making more than minimum wage, but less than $10.10 an hour

FT_14.10.17_lowWageVoters in four states easily approved ballot initiatives to raise their minimum wages on Tuesday, further evidence of strong public support for the idea that the current federal minimum of $7.25 an hour isn’t enough for today’s workers. The votes in Alaska, Arkansas, Nebraska and South Dakota mean that by Jan. 1, 29 of the 50 states (plus the District of Columbia) will have higher minimums than the federal standard.

President Obama and many Democrats have pushed for raising the federal minimum wage to $10.10 an hour, although efforts in Congress to do that fizzled this summer. And with Republicans, who generally oppose raising the minimum wage, winning control of the Senate and expanding their House majority yesterday, it’s unlikely that any new effort in Congress will get very far.

Thanks to the Bureau of Labor Statistics, we have a fairly good idea of who makes the federal minimum wage. But we wondered about the demographics of workers who are a step higher on the wage scale — that is, people earning above whatever minimum applies in their state but less than the $10.10 target. A barista making $9.10 an hour in Portland, for example, would be a minimum-wage worker there but wouldn’t show up in the BLS analysis. (The $7.25 federal minimum wage applies unless state or local law sets a higher rate.)

After analyzing public-use microdata for 2013 from the Current Population Survey (the same monthly survey that underpins the BLS’s wage and employment reports), we estimate that last year about 20.6 million people — 30% of all hourly, non-self-employed workers 18 and older — are in that “near-minimum-wage” category. That includes 8.8 million people in states with minimums above $7.25, and 11.8 million in states where the federal rate applies.

This broader group of low-wage workers looks much like the approximately 3.3 million hourly workers who earned the federal minimum or less last year. (The $7.25 rate doesn’t apply to tipped workers and a few other categories.) Altogether, nearly 24 million workers would potentially benefit from a minimum-wage increase to $10.10.

The near-minimum are young (just under half are 30 years of age or younger), mostly white (76%, a bit below whites’ 79.2% share of all wage and salary workers), and more likely to be female (54%) than male (46%). Most have low educational levels: 56% have no more than a high-school education, while another 37% have some college but less than a bachelor’s degree. Hispanics, who make up 16.4% of all wage and salary workers, comprise more than a quarter (26.7%) of the near-minimum group.

Different demographic subgroups are more or less likely to fall into this low-wage group. For example, 46% of female Hispanic hourly workers were near-minimum in 2013, but only 25% of male hourly workers who are white were. Two-thirds (67%) of employed women with less than a high-school diploma were near-minimum, versus just 10% of women workers with master’s degrees or higher educational credentials.

Looking at the U.S. by the Census’s regional divisions, near-minimum workers generally were more common in the South than elsewhere. More than a third (36.7%) of wage and salary workers in the West South Central division (Arkansas, Louisiana, Oklahoma and Texas) and 36.2% in the East South Central division (Alabama, Kentucky, Mississippi and Tennessee) earned near-minimum pay, as did 31% of workers in the South Atlantic division (which stretches from Delaware to Florida). They were least common in New England, where less than a quarter (23.4%) of workers earned near-minimum pay.

Topics: Work and Employment

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

  2. Photo of Steve Schwarzer

    is a research methodologist at Pew Research Center.

14 Comments

  1. Mike Soos1 year ago

    Never ever accept the minimum wage. This is a number put forth by the federal government to keep companies somewhat in check but most employers have now become dependent on this number in order to obtain the cheapest available labor from men and women.

    No company is going to sell their product or service without the benefit of a return. As an employee neither should you. It is through your hard work that they are able to make a profit to begin with. It is completely ok to walk out of an interview when an employer insults you by offering you minimum wage or even a couple dollars above it. Be polite and simply state that you do not support this type of business.

    Always ask for a living wage, which is a number that you derive from the cost of your living expenses. If you will have to struggle to pay your rent or your car payment or gasoline to drive to the business or to even afford your most basic needs of food and clothing, then do not put yourself in a slave labor position. Minimum wage employers can be predators. They will always be on the look out for a bargain even when that bargain is YOU.

    Do not feel ashamed about asking for a living wage. The company can afford it otherwise they would not have advertised for help to begin with. Chances are they will fill the position which you have declined because we currently live in state of acceptance of this behavior by business owners, however do not look back as if this were a lost opportunity, but rather an avoidance of predatory practices by the business elites.

  2. Joseph Warren Holt2 years ago

    It’s only paper and cloth. Your greed and stupidity would have to very high to not want to raise the min. wage.
    A Wage is a pledge or a bet. I’m betting most people don’t acknowledge that money is cloth or paper.
    How do we know when the treasury starts or stops printing?
    The Value of DOLLARS is artificial that is- man made. The value of money is not real. The keeping and setting a minimum assures that someone will be taken advantage of….
    I prefer Jesus “do unto others as you would have done to you”. And I want everybody to have adequate health, heat, water, and shelter.
    I remember when companies paid health care, but now they want the worker to pay for health care. Ironic since it is likely that an employees’ health will suffer because of the work they do, the same work the Lawyers, CEO’s , and accountants won’t do.
    Why aren’t we talking about an equal, or fair wage? How about a maximum wage?
    How about no one making more than say two or ten times the lowest paid worker? I bet that would raise the minimum wage in a hurry.
    How about an equal tax break for everyone, say, just above the poverty line? Then none would be poorer than the min. threshold.
    Th rich do not want to raise the min wage because of greed.
    The word guilt is closely related to the words gild and gilt, or covered in gold.
    The words “In GOD we TRUST” are a contract. When you pay unfair wages or charge unfair prices, it is a symptom of guilt.

    1. MKCinFLA1 year ago

      While you are correct that money has no real value as paper, cloth (or scrap metal), the system by which we utilize it is all too real. And in the end that is all that counts when it is the determining factor in placing a roof over one’s head or food in one’s belly. To quibble over the “reality” of money is a frivolous philosophical time waster. Clearly, you have no financial worries.

    2. Evan Shlegelheimer11 months ago

      Are you daft man? Do you also think that food is some metaphorical thing that you can just pray into existence? When that cloth or paper is what is used to pay for your sustenance or shelter, it becomes very ‘real’ indeed. The only way that money would have no value is if you never needed food, shelter, medicine, or anything else that society provides.

  3. Dave Thomas2 years ago

    When will someone recognize the connection between our declining secondary education system and the failure of Americans to acquire skills that earn a decent living?

  4. Ali Bertarian2 years ago

    Those who have an affinity for the bumper sticker slogan “living wage” must ask how many of the workers in the near-minimum wage category were the sole wage earners of households? It is too bad Schwarzer didn’t provide that necessary information.

    1. Helen2 years ago

      Note the report points out that that nearly $24 million would benefit from raising the minimum wage to $10.10. If there were 100,000-500,000 jobs lost as a result of the increase, there would still be nearly 23.5 million people benefiting. Perhaps some of those could get off tax payer funded assistance.

  5. James Morgan2 years ago

    Every breadwinner who makes minimum wage or less costs us all in providing Medicare, food stamps, Section 8 housing and subsidized day care, among other federal programs. It is a fallacy that raising the minimum wage to the level of a living wage costs jobs. This argument presumes that employers hire more people than they need and will fire those surplus employees if they have to pay them more. The federal minimum wage and state and local minimum wages have been raised many times without the loss of jobs.

    1. Ali Bertarian2 years ago

      There would be a projected job loss of 100,000 to 500,000 jobs, depending upon the amount of minimum wage raise, according to the Congressional Budget Office. (“The Effects of a Minimum-Wage Increase on Employment and Family Income,” Congressional Budget Office, Feb. 2014.)

      “Only 11.3% of workers who would gain from the increase live in households officially defined as poor… 63.2% of workers who would gain were second, or even third, earners living in households with incomes equal to twice the poverty line or more.” news.investors.com/print/ibd-edi…

      “Only about 7 percent of those below the federal poverty line work a full-time job of any sort. Meanwhile, many of those who earn the minimum wage aren’t poor at all. Roughly 42 percent live with a parent or relative, while another 18 percent are married second income earners, which helps explain why the average family income of a minimum wage earner is $53,000 per year.” reason.com/archives/2014/09/13/d…

      1. Joseph Warren+Holt2 years ago

        My local weather forecaster(s) can be off by ten degrees. So why do you think the congressional budget office forecast is accurate?
        Congress votes it’s own raise but will not give US the same.
        Do we have less people in congress because they raised the minimum congressional wage?
        I think every American deserves the exact wages and health care as congress. They are supposed to work for US.
        Maybe those people living at home could buy or rent thier own home if their wages were raised.
        ALI, I doubt you make the minimum, so why fight to keep other$ down?
        Treat others as you would have done to YOU.

        1. Evan Shlegelheimer11 months ago

          Do you think anyone would still be in Congress (have to go to school for 8 years, spend countless amount on books, time, and energy, endure strict deadlines, heightened stress and maybe even some health issues in result) if they made minimum wage? And how many Americans blame everything on the government? Would you take that responsibility making only minimum wage?

      2. M Robinson2 years ago

        Tens of millions benefit: meh, they don’t need the money anyways.
        At worse case a half a million jobs might not be there: babies go without food.

        Reason needs to work on its reasoning ability.

    2. david westfall2 years ago

      ali,
      when i was a teenager, gas stations hired kids to pump gas and check tire pressure and wash car windows and check the oil level in a cars motor. any idea why these jobs disappeared?

      1. Richard DeSilver2 years ago

        Sure. Individuals do all those things for themselves now.