debates raising the minimum wage, Congress should consider which
workers-assuming that their jobs are not casualties of the higher
minimum wage-the change would benefit. Data from the Department of
Labor show that most minimum wage-earners are young, part-time
workers and that relatively few live below the Poverty line. A
minimum wage hike, then, is more a raise for suburban teenagers
than for the working poor. If Congress is serious about helping the
working poor, it should look elsewhere than raising the minimum
Americans earn the federal minimum wage.
In 2005, 1.9 million Americans reported earning $5.15 or less per
This amounted to 2.5 percent of all workers earning hourly wages
and 1.5 percent of all workers in the United States. But these
numbers include workers who also earn tip income. Many of those
earning less than the minimum wage work in restaurants and so make
more than the minimum after taking their tips into account. Using
another measure of earnings that includes tips, 1.3 million
Americans earn the minimum wage or less per hour, or 1.1 percent of
the total working population.
Most workers who
earn the minimum wage or less fall into two categories: young
workers, usually in school, and older workers who have left school.
The majority of minimum wage-earners fall into the first category:
53 percent of those earning $5.15 or less per hour are between the
ages of 16 and 24. 
The remainder are 25 years of age or older.
Demographic Characteristics of
Minimum Wage Workers
||16-24 years old
Wage and Income Characteristics of
Minimum Wage Earners
|Avg. family Income
|At or Below the Poverty Line
|family Income > 200% of Poverty Line
education Levels of Minimum Wage
|Less Than High School
|High School Graduate
|Bachelors Degree or Higher
Source: Heritage Foundation calculations based on the
Bureau of Labor Statistics, 2005 Current Population Survey and
merged outgoing rotation group files
workers under 25 are typically not their family's sole breadwinner.
Rather, they live in middle-class households that do not rely on
their earnings. For the most part, they have not finished their
schooling and are working part-time jobs. These workers represent
the largest group that would directly benefit from a higher minimum
Here are a few
important characteristics of the teenagers and young adults who
earn the minimum wage or less:
- Fully 67 percent
work part-time jobs.
- Their average
family income is $64,000 per year.
- Only 17 percent
live at or below the Poverty line, while 65 percent enjoy family
incomes over twice the Poverty line.
- They have less
education than the population as a whole. Fully 36 percent have not
completed high school, and 21 percent have only a high school
degree. Another 37 percent have taken college courses but do not
yet have a bachelor's degree; many of these are college students
working part-time while in school.
- Fully 65 percent
- Only 5 percent
Even the vast
majority of older adults who earn the minimum wage live above the
Poverty line. They have an average family income of $33,600 a year,
well above the Poverty line of $19,806 per year for a family of
four. Most of them choose to work part-time, and a sizeable number
are married. The average older minimum wage-earner simply does not
fit the stereotype of a worker living on the edge of
Here are a few
important characteristics of the 47 percent of minimum wage-earners
who are over the age of 24:
- More than half-56
percent-work part-time jobs.
- They have an
average family income of $33,606 per year.
- Just 23 percent
live in Poverty, while 45 percent have incomes over twice the
- They are better
educated than younger minimum wage workers. Just 22 percent have
less than a high school education, while 39 percent have only a
high school diploma and 21 percent have taken some college
- 66 percent are
- 43 percent are
Minimum Wage Workers
All Hourly Workers
Working Full Time,
25 yrs and older
Source: Heritage Foundation calculations based on the Bureau
of Labor Statistics, 2005 Current Population Survey and merged
outgoing rotation group files.
Many advocates of higher minimum wages argue that the minimum wage
needs to rise to help low-income single parents. However, minimum
wage workers do not fit this stereotype more than the population as
a whole. Just 6.1 percent of minimum wage workers over the age of
24 are single parents working full-time, compared to 6.3 percent of
all hourly workers.
raising the minimum wage because they want to help low-income
Americans get ahead. But while some minimum wage-earners do live
below the Poverty line, these workers are far from representative.
Only one in five minimum wage-earners lives in a family that earns
less than the Poverty line. Three-fifths work part-time, and a
majority are under 25 years old. Minimum wage-earners' average
family income is almost $50,000 per year. Very few are single
parents working full-time to support their families-no more than in
the population as a whole. It is not surprising, then, that studies
show that higher minimum wages do not reduce Poverty rates.
Instead of raising the minimum wage, Congress should look at other
ways to aid the working poor that actually focus on providing help
to those who need it.
Hederman, Jr., is a Senior Policy Analyst, and James Sherk is a
Policy Analyst, in the Center for Data Analysis at The Heritage
Based on the Bureau of Labor Statistics's Current Population
Survey. All numbers, except average household income and Poverty
status, come from the 2005 Merged Outgoing Rotation Group (MORG)
file of the CPS. Poverty and household income statistics come from
the full 2005 CPS data. See Bureau of Labor Statistics,
"Characteristics of Minimum Wage Workers: 2005," at .
Some workers earn less than the minimum wage: Restaurants can pay
workers less than the minimum if their tip income elevates their
income above $5.15 per hour. Additionally, many minimum wage
workers appear to round their wages down to $5.00 per hour when
surveyed about their earnings.
Workers were defined as being at or below the minimum wage if they
reported being paid hourly wages and their usual weekly earnings
divided by their usual hours worked per week was less than or equal
to $5.15 an hour.
To maintain consistency with BLS estimates, this paper's statistics
refer to workers who earn the minimum wage or less, not counting
their tip income.
The Poverty level for a family of four in 2006 was $20,000 a year.
See Department of Health and Human Services, "The 2006
A single parent is defined as someone who reports that he or she is
the head of the household, has one or more of his or her own
children present in the household, and who is either widowed,
divorced, separated, or was never married. Looking at all workers,
irrespective of age, minimum wage workers are less likely to be
single parents working full-time than the population as a whole-4.2
percent vs. 5.6 percent in the population as a whole. This is
because large numbers of teenagers and young adults, who are less
likely to be single parents, earn the minimum wage. As reported in
Table 2, taking into account only workers older than 24 years
results in no statistically significant difference between minimum
wage workers and the population as a whole.
See, e.g., David Neumark, Mark Schweitzer, and William Wascher,
"Order from Chaos? The Effects of Early Labor Market Experiences on
Adult Labor Market Outcomes," Industrial and Labor Relations
Review, Vol. 51, no. 2, January 1998, pp. 299-322. See also
David Neumark and William Wascher, "Do Minimum Wages Fight
Poverty?," Economic Inquiry, 2002, v40(3,Jul), pp.