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?
Image Credit: Pixabay
MrFireStation 
I worked for minimum wage briefly when I started working in the fast food business, but it lasted a couple of months before I got $1/hr raise. Essentially, that was the hiring rate, but with ZERO work experience it was like a trial where they got me cheaper for a month and could cut me if I didn’t work out. After that, I had another bought with minimum wage as a “bag-boy” at Kroger, but again, this was only for a few months before I got a nice bump.
Like your McDonalds experience, I’ve only noticed minimum wage pay as a stepping stone/trial period to above that sort of pay. Maybe I just got lucky in regard to not experiencing that for very long.
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I think businesses do sometimes use it as a ‘trial wage’ during your initial probation period. In our city, bagging groceries was always a union job. No surprise that few stores bag groceries anymore.
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Thanks for sharing these statistics. It is fascinating to see them broken down in this way. I retired (at age 56) from a long career in educational administration where I had been blessed to have good paying jobs. My road to that career was filled with numerous minimum wage jobs and even jobs that paid far below minimum wage (In the 70’s I babysat for 50 cents an hour…and that included the hours past midnight…and household tasks that were thrown in). Each of these positions taught me immeasurable skills that I may not have learned elsewhere. I don’t need to work now (she says knocking on her computer) but, like your wife, would certainly take a minimum wage job again if the position suited me. I recognize that it is not people like me that are at the center of the minimum wage debates. But, as you indicate above, people like me also do contribute to the stats.
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As a teenager if I recall correctly I always made a little bit above minimum wage. Maybe $0.25 or 0.50, but given they fact that I didn’t need a lot of experience or a lot of skills for the jobs I had I could not complain. I have two teenagers working now and they started at $10 an hour. I was surprised to find they started above minimum wage. My children have realized quickly that even making $11-12 and hour is not a sustainable rate, great for a P/T job, but not a long term career.
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Good that your kids understand that. We have a neighbor who sat down with her kids and they ‘priced out’ on paper what a sustainable salary needs to be to live the life they want. Seems like a good exercise to do with your kids. She said her daughter was quite how expensive the house & sports car she wanted would cost 🙂
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I also got above minimum wage at my starter job, intentionally. As a cashier at ShopKo (in Southern MN) I made $3.85, at a time when my friends in fast food were pulling down $3.35 like Mr. FireStation. I am in a STEM career now, so the numbers aspect of the job made it very easy.
One thing this post doesn’t mention, regarding the over 35 category, is who might be over 65–that is, the stereotypical Wal-Mart greeter, earning some cash to make ends meet in retirement. (or because they enjoy it; I have occasionally seen store greeters that are quite happy) I think this would make an interesting correlating statistic with all the stories that talk about lack of retirement preparedness. (of which I am skeptical, not least of which because most, but not all, look at retirement accounts, not people–they don’t account for multiple)
I see $11 per hour often in MI. I also take that as a sign of good competition, even for entry-level work. If we were just at the minimum wage, it would be a bad sign for the local economy.
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The Walmart greeter example is an interesting one. It would be intriguing to talk to a few and see why they do it. My wife works part-part-time at a local boutique for the fun of it – even if she doesn’t make much more than the minimum.
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FYI: http://15now.org/about/
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I’ve never made minimum wage. My high school jobs were lifeguarding which paid about fifty percent more then he then minimum wage. I do wonder what the story is for those over thirty five working for minimum wage as the hurdles to higher income don’t appear to be all that high if you have experience. They are not jobs I’d like to do of course.
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Wow – fifty percent higher than minimum wage sounds like a great wage in high school. I guess there is a lot more training & responsibility in lifeguarding than most other jobs though.
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Gosh, I can’t remember what I made when I was working at the golden arches, but I’m sure it was minimum wage or just above it. But, when I was working there as a grill person, I didn’t have any skills. My opinion is that minimum wage positions are not meant to support families. I, too, do not want to get political, and I understand there are reasons for keeping the wage the same and reasons for increasing it to, say $15/hr. I also saw recently that McDonald’s is rolling out automated ordering, replacing counter employees, in a response to the increased wage demand. I’m not sure if it truly is in response to the minimum wage war we’re currently experiencing, but I wouldn’t be surprised. Just my two cents 🙂
Mrs. Mad Money Monster
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The automated robot machines are certainly have significant economic considerations for fast food places. Our local movie theater just added them too. I bet once people get used to using them, they will also be faster and reduce order errors.
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