88 percent of minimum wage workers are above the age of 20. A third are at least 40 years old.
Originally published on OccupyDemocrats
by Salvatore Aversa
When discussing wages of Americans, we must first address minimum wage. Many people believe that a majority of minimum wage workers are teenagers just entering the work force, and if we raise the minimum wage, it would affect those teens disproportionately to adults. In ways, they would be right, but not how you may think.
A recent study found that a majority of minimum wage workers, 88 percent, are actually above the age of 20. A third of those are at least 40 years old.
Living in a post-industrial time has presented many challenges to American workers. One of them, is that good wage jobs, that are accessible to non-college educated adults are nearly nonexistent. Even college educated people are having a difficult time finding a job in their desired field. Instead, they have been replaced by low-wage, part-time service jobs.
President Obama has asked for a $9.00 an hour minimum wage. Had the minimum wage kept up with inflation, it would be over $10 an hour today. Instead, wages have leveled out to the federal minimum wage of $7.25 an hour. An increase would benefit mainly older workers.
When describing who would see a raise if the minimum wage were increased, it is important to look at everyone who earns between the current minimum wage and the proposed new one, as well as workers earning just above the new minimum wage (who would likely also see a small pay increase as employers move to preserve internal wage ladders).
In fact, by 2015, the average minimum wage worker will look nothing like the teenager at McDonald’s that we expect. Instead, by and large, they will be predominantly women, in their early 30s, working full time, and may have a family to support.
Epi.org recently conducted a study. Their results my surprise you.
Our analysis of workers who would benefit from an increase in the minimum wage shows:
The average age of affected workers is 35 years old
88 percent of all affected workers are at least 20 years old
35.5 percent are at least 40 years old
56 percent are women
28 percent have children
55 percent work full-time (35 hours per week or more)
44 percent have at least some college experience
When the Bureau of Labor Statistics conducts their studies, their findings generally find the opposite. This is because they look at people who make $7.25 and lower, and they are generally those just entering the work force. However, that creates a problem
[This] data [does] not provide an accurate picture of who would see a raise if the minimum wage were increased, because they exclude all workers from the 19 states with higher state minimum wages, along with all workers making slightly above the current federal minimum wage but below the proposed minimum, all of whom would see a raise if the minimum wage were increased.
Those who say that if you are not happy at your current job, just find another, clearly have no understanding of what the market is like today.
The fact is, most minimum wage jobs are at highly profitable corporations. A report issued in July 2012 found that most minimum wage workers are not found in mom and pop shops or small businesses, but rather large corporations that have been very successful in recent years, despite a sluggish economy.
The report was published by the National Employment Law Project, or NELP. NELP found that two-thirds of America’s low-wage workers, are employed for companies that have more than 100 employees.
The three largest low‐wage employers in the United States – Wal‐Mart, Yum! Brands (the operator of fast food chains Pizza Hut, Taco Bell, and KFC), and McDonald’s – offer a revealing look at the resiliency of low‐wage employers in the post‐recession economy.
Each of these corporations was profitable during all of the last three fiscal years, and each of them now earns profits that are substantially higher than their pre‐recession levels.
At the time of the study, Walmart’s profits had increased 23%. Yum! Brands increased 45%. And McDonald’s saw their profits soar 130%. Further, of the 50 largest employers of low-wage workers, more than 90% were profitable and three-quarters of them had revenue greater than they did before the Great Recession.
This is why many workers at Walmart and McDonald’s, in particular, have started to protest against the corporations for a higher wage. It also suggests that these companies would be able to afford an increase in minimum wage without hardship.
Most large employers of low-wage workers “are earning profits above their pre‐recession levels, and are sharing those profits generously with their top executives and shareholders,” the report states. “Taken together, these indicators show that the nation’s top low‐wage employers can readily afford to pay for a higher minimum wage for their lowest‐paid employees.”
Some argue that a higher minimum wage would mean less jobs. However, history and statistics show the opposite. When people have more money, they tend to spend it, and it spurs the economy. Economics is much more intricate than any one simple statement, such as this. When a simple answer is given to a complex question, it should raise alarms that something is wrong.
A Senior Economist at the Center for Economic and Policy Research, John Schmitt, reported in February 2013 that multiple meta-studies, which used statistical techniques to analyze a large amount of separate studies, found that there has been no statistical significance in the effects of raised minimum wages and unemployment. In other words, statistically, a higher minimum wage does not mean higher unemployment. And even with an increase to a $9 hourly wage may not be enough.
Full-time workers in minimum wage jobs are poor, despite their evident willingness to work. Even if the minimum wage is raised to $9.00 an hour from the current $7.25 an hour, as Obama has proposed, these working poor will still be earning well less than poverty line income. And bringing the minimum wage to $9.00 an hour will only bring it back to where it was more than a half century ago. Real GDP per capita has more than doubled over this period. Yet minimum wage workers are currently earning 20% less.
If the Republicans are so adamant on personal responsibility, what better way to allow people to earn a livable wage and relying less on government subsidies. We have a moral obligation to make sure people can afford the basic necessities and a roof over their homes. Republicans love to spread the myth of the “welfare queen” driving in a Cadillac, living off taxpayers dollars. The fact is, with the few exceptions of course, most people are working harder and harder while seeing less and less in their paycheck. They are finding their dollar’s buying power is become less as well. If you want to know why the Recession still is not over, look no further than wages in America. It is holding the tax base and the economy from expanding.
Unless there is a change on “leadership” in the House of Representatives in 2014, it is unlikely that any such policy will pass, leaving low-wage worker’s buying power worse and worse. There must be a change if we want to see our economy thrive again.