Tuesday, June 20, 2006

Who earns the minimum wage?

The minimum wage is heating up as a political issue, so some readers might want to learn more about the characteristics of minimum-wage workers. The Labor Department has a good fact sheet on the topic.

One fact missing from this sheet, however, is the percentage of minimum-wage workers who are in families below the poverty line. Although the minimum wage is often considered an anti-poverty program, in fact many minimum-wage workers are teenagers from middle-class homes. For example, my first full-time job (exactly 30 years ago) was a minimum-wage job; although my family wasn't rich, we also weren't poor.

An old study from the CBO reports:

Four-fifths of all minimum wage workers are not poor.... Part of the explanation for why so many minimum wage workers are not poor is that over two-thirds of them are in families in which at least one other member has a job.
I am sure someone has updated this fact, but I don't know a source. I checked with one of my empirical labor economist friends, and he said this CBO number still seemed about right to him.