When Living Wage Is Minimum Wage FiveThirtyEight
OUR CHANGING ECONOMY 6:25 AM MAR 18, 2014
When Living Wage Is Minimum Wage
By
BEN CASSELMAN
A generation ago, people making the minimum wage were largely teenagers. Today, as President Obama pushes to give 25 million low-wage workers a raise, that’s no longer true.
The minimum wage debate hinges on an essential question: Who would be affected by an increase? If minimum-wage workers were mostly teenagers and others supplementing their household income, as Republicans have often argued, a raise would have different implications than if these workers were mostly adults struggling to raise a family, as many Democrats contend.
Census data reveals that more than half of all workers now earning below President Obama’s proposed minimum wage of $10.10 per hour are trying to support themselves. It’s true that low-wage workers tend to be younger than the population as a whole, and that many of them are teenagers. But a significant and growing minority are also trying to raise children of their own.
Finding information on who would be affected by an increase in the minimum wage is surprisingly difficult. The Bureau of Labor Statistics publishes an
annual report that gives a breakdown of minimum-wage earners by age, sex, education and other factors. But the report does not distinguish, for example, between a 22-year-old single mom trying to feed her kids and a 22-year-old college student working a few shifts to keep her debt manageable.
Worse, the official report provides no information on people who earn just above the minimum wage — even though that group dwarfs minimum-wage workers. To learn more about this larger group, we have to look at the Current Population Survey, a monthly review conducted by the Census Bureau, which allows for a much more detailed analysis of the low-wage workforce.
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According to the survey, in 2013 more than 25 million people earned less than $10.10 an hour, which amounts to an annual salary of roughly $21,000. That’s nearly eight times the number of Americans who work for the current minimum wage of $7.25 an hour or less.2 Low-wage workers tend to be older than their minimum-wage counterparts: Nearly 60 percent, or 15 million Americans, of this group is 25 years old or older compared to about half of minimum-wage workers.3
What we really want to know, however, isn’t how old these workers are — it’s how many of them are trying to support themselves and their families on these wages. To estimate that number, we first need to define what we mean by “supporting themselves.” We’ll start by eliminating both teenagers and retirees from our count, limiting ourselves to people between the ages of 20 and 64. A substantial — and increasing — number of young adults are living with their parents, so we’ll also exclude anyone under 30 whose parent is in the same household.
4 A trickier question is how to handle multiple-earner households; we’ll include anyone who is unmarried, whose spouse is absent or doesn’t work, or whose spouse is also a low-wage worker.
5
Based on that definition, there were 13 million Americans, out of the 25 million low-wage earners, who were trying to support themselves on less than $10.10 per hour in 2013.
6 Some 4.5 million of them were also raising children.
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