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April 11, 2005

Minimum Wage Earners in the US.

Via Steve Antler, figures on who earned the minimum wage in the US in 2004. Not very many.

Of those paid by the hour, 520,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage, and another 1.5 million were reported earning wages below the minimum.

As they point out, those earning below minimum are almost all in the food service industries (About three in four workers earning $5.15 or less in 2004 were employed in service occupations, mostly in food service jobs). and getting tips. I’ve worked over there for $2.01 an hour (back when minimum was $3.35 an hour) and never really worred about the pay cheque. The $100 a shift in tips was more important. Even when working at a Denny’s on the graveyard shift I was getting $20-$30 in cash per an 8 hour shift.

Minimum wage workers tend to be young. About half of all hourly-paid workers earning $5.15 or less were under age 25, and about one-fourth were age 16-19.

There’s two ways you can look at this. There’s half a million on minimum wage and not getting tips and half of those are teenagers and students (or of student age). So, it is important for us to raise the minimum wage as we will be benefitting those few quite cheaply. Or alternatively, that so few get it that we can forget about it, for as we know, increasing the cost of such untrained labour will simply reduce the number of positions and hours offered to it.

Your call I guess.

April 11, 2005 in Economics | Permalink


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Don't most states have minimum wages higher than the Federal minimum? If so, that significantly diminishes the usefulness of the study...

Tim adds: Some do, most don’t. I thought the most interesting figure was that for those who also get tips. 3/4 of the total.

Posted by: john b | Apr 11, 2005 6:20:16 PM