Characteristics of Minimum Wage Workers: 2007
According to Current Population Survey estimates for 2007, 75.9 million American workers were paid at hourly rates, representing 58.5 percent of all wage and salary workers. On July 24, 2007, the Federal minimum wage increased to $5.85 per hour from $5.15 per hour. Data in this report reflect the average number of workers earning the prevailing Federal minimum wage or less for the year (those who earned $5.15 or less from January 2007 through July 2007 and those who earned $5.85 or less from August 2007 through the end of the year). Among those paid by the hour in 2007, 267,000 were reported as earning exactly the prevailing Federal minimum wage. Nearly 1.5 million were reported as earning wages below the minimum. Together, these 1.7 million workers with wages at or below the minimum made up 2.3 percent of all hourly-paid workers. Tables 1-10 present data on a wide array of demographic and socioeconomic characteristics for hourly-paid workers earning at or below the Federal minimum wage. The following are some highlights from the 2007 data.
- Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up almost half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 7 percent earned the minimum wage or less, compared with fewer than 2 percent of workers age 25 and over. (See table 1 and table 7.)
- About 3 percent of women paid hourly rates reported wages at or below the prevailing Federal minimum, compared with about 1 percent of men. (See table 1.)
- The percent of workers earning the minimum wage did not vary much across the major race and ethnic groups. About 2 percent of white, black, Asian and Hispanic hourly-paid workers earned the Federal minimum wage or less. (See table 1.)
- Among hourly-paid workers age 16 and over, about 3 percent of those who had less than a high school diploma earned the minimum wage or less, compared to 2 percent of those who had a high school diploma (with no college) and 1 percent of college graduates. (See table 6.)
- Never-married workers, who tend to be young, were several times more likely than married workers to earn the minimum wage or less. (See table 8.)
- Part-time workers (persons who usually work less than 35 hours per week) were more likely than their full-time counterparts to be paid the Federal minimum wage or less (about 5 percent versus 1 percent). (See table 1 and table 9.)
- By major occupational group, the highest proportion of workers earning at or below the Federal minimum wage was in service occupations, about 7 percent. Nearly three in four workers earning the minimum wage or less in 2007 were employed in service occupations, mostly in food preparation and service jobs. (See table 4.)
- The industry with the highest proportion of workers with reported hourly wages at or below the Federal minimum wage was leisure and hospitality (about 12 percent). About three-fifths of all workers paid at or below the Federal minimum wage were employed in this industry, primarily in the food services and drinking places component. For many of these workers, tips and commissions supplement the hourly wages received. (See table 5.)
- Among the States, Louisiana, Massachusetts, Mississippi, South Carolina, and Texas had the highest proportions of hourly-paid workers earning at or below the Federal minimum wage (at about 4 percent). The percentage of workers earning at or below the Federal minimum wage was lowest (1 percent or less) in Alaska, California, Montana, Oregon, and Washington. It should be noted that some states have minimum wage laws establishing standards that exceed the Federal minimum wage. (See table 2 and table 3.)
- The proportion of hourly-paid workers earning the prevailing Federal minimum wage or less has trended downward since 1979, when data first began to be collected on a regular basis. (See table 10.)
Source: U.S. Department of Labor, Bureau of Labor Statistics. Bureau of Labor Statistics' data on minimum wage earners are derived from the Current Population Survey (CPS), a nationwide sample survey of households that includes questions enabling the identification of hourly-paid workers and their hourly wage rate. Data in this summary are 2007 annual averages.
1 Data are for wage and salary workers, excluding the unincorporated and incorporated self-employed, and refer to earnings on a person's sole or principal job.
2 It should be noted that the presence of a sizable number of workers with reported wages below the minimum does not necessarily indicate violations of the Fair Labor Standards Act, as there are exemptions to the minimum wage provisions of the law. The estimates of the numbers of minimum and subminimum wage workers presented in the accompanying tables pertain to workers paid at hourly rates; salaried and other non-hourly workers are excluded. As such, the actual number of workers with earnings at or below the prevailing minimum is undoubtedly understated. Research has shown that a relatively smaller number and share of salaried workers and others not paid by the hour have earnings that, when translated into hourly rates, are at or below the minimum wage. However, BLS does not routinely estimate hourly earnings for non-hourly workers because of data concerns that arise in producing these estimates. For further information, see Steven Haugen and Earl Mellor, "Estimating the number of minimum wage workers," Monthly Labor Review, January 1990 (PDF 415K).
Characteristics of Minimum Wage Workers: 2007, Tables 1 - 10
Characteristics of Minimum Wage Workers: 2007 (PDF 88 K)
Last Modified Date: March 25, 2008