The House of Representatives recently voted to increase the
minimum wage in an attempt to improve the lives of the working
poor. Most minimum-wage workers, however, are not poor. Congress
should examine which workers-assuming that their jobs are not
casualties of the higher minimum wage-the change would benefit. And
if Congress is serious about helping the working poor, it should
look elsewhere than raising the minimum wage.
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. Their average family income is over
$50,000 a year. A minimum wage hike, then, is a raise for suburban
teenagers, not the working poor.
Relatively few Americans earn the federal minimum wage.[1] In
2006, 1.7 million Americans reported earning $5.15 or less per
hour-just 1.3 percent of all workers in the United States.[2]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 tips into account. Another
measure of earnings that includes tips reveals that 1.2 million
Americans earn the minimum wage or less per hour-just 1.0 percent
of the total working population.[3]
After-School Jobs
Minimum-wage earners fall into two distinct categories: young
workers, usually in school, and older workers who have left school.
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.[4] The rest are 25 or older.
Minimum-wage workers under 25 are typically not their family's
sole breadwinner. Rather, they tend to live in middle-class
households that do not rely on their earnings. Generally, 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 wage.
The characteristics of the teenagers and young adults who earn
the minimum wage or less support the notion that these minimum-wage
workers rarely work to support children and their families:
-
Over 73 percent work part-time jobs.
-
Their average family income is $63,600 per year.
-
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.[5]
-
Most have not finished their education. Three in eight have not
yet finished high school, while a quarter have only a high school
degree. Another 31 percent have taken college courses but not yet
graduated; many of these are college students working part-time
while in school. Only 7 percent have finished college and obtained
a degree.
-
Fully 66 percent are women.
-
Only 6 percent are married.
-
Only one-half of 1 percent belong to a labor union.
Older Workers
Adults who earn the minimum wage are less likely to live in
middle- and upper-income families than the teenagers and young
adults who earn the minimum wage. Nonetheless, the vast majority of
older workers earning the minimum wage live above 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.[6]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 destitution.
A few important characteristics of the 48 percent of
minimum-wage earners who are over the age of 24 bear this out:
-
Most work part-time jobs.
-
They have an average family income of $36,266 per year.
-
Just 20 percent live in poverty, while 37 percent have incomes
over twice the poverty line.
-
They are better educated than younger minimum-wage workers but
still have less education than the population as a whole. Just 19
percent have less than a high school education, while 40 percent
have only a high school diploma and 20 percent have taken some
college classes. However only 1 in 10 have a bachelor's degree-far
less than the 25 percent of all Americans in that category.
-
68 percent are women.
-
41 percent are married.
-
4 percent belong to a labor union.
Few Single Parents
Many advocates of higher minimum wages argue that the minimum
wage needs to rise to help low-income single parents. Minimum-wage
workers, however, do not fit this stereotype. Just 4.1 percent of
minimum-wage workers are single parents working full-time, compared
to 5.4 percent of all hourly workers.[7] Minimum-wage earners are
actually less likely to be single parents working full-time than
average American workers as a whole.
Conclusion
Many support raising the minimum wage because they want to help
low-income Americans get ahead. But minimum-wage earners are not
much more likely to live in poverty than most Americans: Only 1 in
5 live in a family with earnings below the poverty line. Over
three-fifths work part-time, and most are between 16 and 24 years
old. Minimum wage-earners' average family income exceeds $50,000 a
year. And very few are single parents working full-time to support
their families-fewer than in the population as a whole. It is not
surprising, then, that studies show that higher minimum wages do
not reduce poverty rates.[8]Rather than raise the minimum wage, Congress
should consider other ways to aid the working poor that actually
provide help to those who need it.
James Sherk
is Bradley Fellow in Labor Policy, and Rea S. Hederman, Jr., is
Senior Policy Analyst, in the Center for Data Analysis at The
Heritage Foundation.