Regardless of your politics, you can’t help but notice the discussion around minimum wage that has been on the news over the last year. I won’t make this post political, but at the risk of great blogging danger, I wanted to share some information I researched (as part of my Sociology class) that describes who minimum wage workers are.
Afterall, many people start their journey to a life of FIRE (financial independence & retiring early) with a first job that often pays minimum wage. I have a friend who told me he started saving for retirement when he was just 19 years old (and likely just earning minimum wage himself)!
It has certainly been a long time since the minimum wage was relevant to me. Even when I started working (at a Target Store) in the early 1980s, I made a full nickel more than the minimum wage of the time ($3.35). Other than a job as a newspaper boy when I was a kid (which is exempt from minimum wage laws), I don’t think I ever made minimum wage in my life.
I was surprised to learn that minimum wage laws date back to the 1300s in medieval England. Apparently, they started as maximum wage laws – because there was a surplus of demand for serfs among the nobles and it was impacting the King Edward III’s royal bottom line. Within a few decades, the maximum wage concept became a minimum wage as the thinking came around to ensuring that laborers had a minimum to live on. Probably a better approach.
NUMBER – I started by looking at how many people make the federal minimum wage, which today is $7.25. I’ve used 2014 data from the US Bureau of Labor Statistics for all of the numbers, to keep things on an objective base. There are about 125 million people working in the USA and about 3 million make minimum wage. That’s about 2.4% of all workers. About two-thirds of these workers are part time, while a third are 32 hours a week or more.
AGE – Most are young people. Over half (56%) of minimum wage earners fall between the age of 16-24. Almost 30% are very young – between age 16-19. I think you can say that many of them are just getting started in their working days. I imagine quite a few of them are students working part time. Another 16% fall between the ages of 25-34. That’s quite a few. The remaining 28% are age 35 or older. I am pretty surprised that so many are that old.
I would certainly expect that most people have developed skills of some sort that would have moved them above minimum wage by age 35, but I also know that some people take jobs they enjoy just for the fun of it. For instance, my wife worked at our preschool and I think they paid her minimum wage. She didn’t do it for the money – she did it for the fun. I’m not saying that’s everyone, but it is some % of the people for sure.
EDUCATION – Level of education among minimum wage workers is also more spread out than I thought. Given the number of very young people earning minimum wage, it’s not surprising that more than half (54%) have only a high school degree or less. Yet fully 46% have some college or a college degree. Of these 9% have a bachelor’s college degree and even 2% have a master’s degree. I really have no idea why so many people with a secondary degree are working minimum wage jobs. It is about 200,000 people. Someone might say that they picked majors poorly, but I would guess there are some other reasons for their employment.
OCCUPATION – By industry, the stereotype of fast food minimum wage jobs holds true as well. Fully 57% work in the leisure / hospitality industry, and another 13% work in retail. I was surprised to see 12% work in government (at local, state & federal levels) and 8% work in education/healthcare. I didn’t find any objective BLS data on people that also receive tips as part of their work – such as wait staff in a restaurant. Some states have lower minimum wages for these folks, others make more than minimum wage when tips are included.
Regarding McDonald’s, we live in the Minneapolis-St. Paul and I went to McDonald’s last week (in a pretty dodgy part of the city) for a breakfast sandwich. I noticed that they were starting hiring at $11.00. That’s way more than the federal $7.25 (or state minimum wage of $9.50). Not sure what that adds here, but was surprised at how high it was.
Again, I won’t get political with this post and I realize that jobs are about more than just what you earn. They are also about what you learn on the job and how that can set you up for other opportunities. I just thought I would share the information in this forum since minimum wage is often discussed and where many of us started our working years. I would, however, be interested in what you might have found surprising or affirming in this profile? What has been you experience with minimum wage jobs?
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