18 Minimum Wage Statistics to Take Note of in 2020
Did you know that the minimum wage is the lowest possible amount that employers can legally pay their workers?
Considering how many people make minimum wage, it is a controversial topic.
Supporters claim it will help to significantly reduce inequality and poverty, while also increasing the living standards of workers and their morale.
Opponents argue it will increase unemployment and poverty because some people will be unable to find work.
Whichever side you happen to support, go ahead and check out the latest minimum wage statistics we’ve gathered for your enjoyment.
Minimum Statistics about Minimum Wage (Editor’s Choice)
- The minimum wage today is worth 17% less than it was a decade ago.
- The average minimum wage in Canada rose by 3.5% yearly from 1998 to 2018.
- Just 20.8% of minimum wage earners are spouses that are working full time.
- 13% of American workers earned the minimum wage in 1980, compared to 2% that do so today.
- Almost 1.3 million jobs will be lost if the federal minimum wage is increased to $9.5/hour.
- 11% of those in hospitality and leisure earn the federal minimum wage or lower.
General Minimum Wage Statistics
1 . Almost 1.3 million jobs will be lost if the federal minimum wage is increased to $9.5/hour.
(Source: VCU)
As alarming as it may sound, a lot of employers cannot afford to pay $9.5/hour to their workers, which would lead to the loss of more than a million jobs. This figure also includes up to 168,000 jobs that are presently held by the working poor.
These minimum wage stats come from research that investigates whether increasing the federal minimum wage will help the working poor.
2 . 13% of American workers earned the minimum wage in 1980, compared to 2% that do so today.
(Source: usafacts)
The number of workers who earn the federal minimum wage has seen a steady decrease since 1980. Back then, the number of minimum wage workers was about 7.7 million people, whereas in 2018, it was just 1.7 million people.
Statistics show that this is in part because some states have set minimum wages that are higher than those set by the federal government.
3. 3% of hourly wage workers at a minimum age of 16 without a high school diploma earned the federal minimum wage.
(Source: BLS)
Minimum wage studies show that there is a slight correlation between income and education.
2% of hourly paid workers who are at least 16 years with a high school diploma earned the federal minimum wage or lower than that.
This figure compares with 1% of college graduates and 2% of those with an associate’s degree or some college degree.
4. The minimum wage in the US has been raised 3x since 1938 and currently stands at $7.25.
(Source: thebalance, US Department of Labor)
You might be wondering:
“What’s the minimum wage in the US?”
The first minimum wage in the United States was $0.25/hour in 1938, which should be about $4.36/hour in 2018, adjusted for inflation. By 1956, it was $1/hour. Today, it’s $7.25/hour.
Most states also have regulations on minimum wage. The employer is entitled to the lower of the two minimum wages in situations where an employee is subject to both state and federal minimum wage laws. The terms of the federal minimum wage were set out in the Fair Labor Standards Act (FLSA).
The FLSA does not provide wage compensation or collection measures above those provided by the FLSA for the regular or agreed wages or commissions of an employee.
Which brings us to:
How many people make minimum wage?
5. In 2018, 1.7 million workers earned the minimum wage.
(Source: USAFacts)
This figure amounts to 2% of all hourly paid, non-self-employed workers who earned wages that year. This number of minimum wage workers tends to fluctuate from year to year. For instance, it stood at 1.8 million jobs in 2017 and 2.6 million in 2015.
6. The minimum wage today is worth 17% less than it was a decade ago.
(Source: Epi)
According to this worrying minimum wage vs inflation stat, people who earned the federal minimum wage ($7.25) 10 years ago were paid the equivalent of $8.70/hour (inflation-adjusted).
What’s worse, today’s federal-minimum-earning workers are paid 31% less than the $10.54/ hour they would have earned in 1968 when the minimum wage hit its peak (inflation-adjusted) level. More precisely, full-time workers pay $6,800 less per year at the federal minimum wage compared to their counterparts five decades ago in real wage earnings.
Minimum Wage and Poverty Statistics
7. 63.5% of poor Americans do not earn wages.
(Source: CATO)
This is because a large percentage of poor Americans do not work. And so, this shows that increasing the minimum wage might not affect the poverty rate.
To tackle this problem, it may be best to consider job creation methods. These minimum wage statistics also show that there isn’t a strong correlation between earning a low hourly rate and living in poverty.
8. 20% of workers earning low wages in the United States are from low-income families.
(Source: ilo)
As many as one in five low-wage workers live in lower-income families, minimum wage and poverty statistics show. In comparison, nearly 30% of wage-earners and 40% of casual wage-earners in India earning less than minimum wage at the state level live in poor households.
9. Only 0.1 percent of workers making minimum wage in the US can afford to buy a one-bedroom apartment.
(Source: CNBC)
Affordability was characterized by the ability of the person to pay up to 30% of their income on housing cost, which generally includes taxes, mortgages, and insurance. Clearly, the cost of housing in the United States has risen to the extent that a one-bedroom apartment is out of reach for the vast majority of minimum wage earners.
Minimum Wage Statistics by State
10. 29 States and DC have a higher minimum wage higher than the federal minimum.
(Source: The Balance Careers)
Some states follow the federal minimum wage of $7.25. These include Alabama, Idaho, Iowa, Kansas, Kentucky, and Louisiana. Minnesota, Oregon, New York, Missouri, and Vermont are among the states with a higher minimum wage.
11. 4.5% of workers in Louisiana earn the federal minimum wage or less.
(Source: usafacts)
Some states have more people earning the minimum wage than others. For example, 4.5% of hourly workers in Louisiana, or 49,000 people, earn the minimum federal wage or less. 1% of hourly workers, or 13,000 individuals, earn the federal minimum wage or less in the state of Washington.
12. The average minimum wage in Canada rose by 3.5% yearly from 1998 to 2018.
(Source: Statcan)
The average minimum wage in Canada rose faster than the average wage for all workers compared to 1998.
By contrasting the actual marginal minimum wage with the real gross wage in 2018, it is clear that minimum wage earners did relatively better.
The average wage increased by 2.7% per year over these 20 years, while the average minimum wage rose by 3.5% per year.
13. The minimum wage in Shanghai, China, is $382/month.
(Source: the balance)
China is a huge country with enormous regional differences in the cost of living, which is why there is no national minimum wage.
The system adopted in China is that each province sets its level while following guidance from the national government.
Minimum Wage Demographics
14. Just 20.8% of minimum wage earners are spouses that are working full time.
(Source: CATO)
Additionally, statistics about minimum wage earners by age show that 30.8% are children. The largest percentage of those who earn a minimum wage is young Americans that are enrolled in school, at about 32.2%.
This shows that most of the workers who earn the minimum wage are young workers, either part-time or from families that are not poor.
15. Workers who are younger than 20 can earn $4.25/hour for the first 90 days after getting a job.
(Source: Debt.org)
Some minimum wage regulations come with exceptions in certain cases.
In jobs where tips are a significant source of income, as is the case with waiters and bartenders, the minimum wage can be as low as $2.13/hour, provided the amount earned in total (tips plus the hourly wages) is at least equal to the federal minimum wage.
16. 11% of those in hospitality and leisure earn the federal minimum wage or lower.
(Source: BLS)
The number of minimum wage workers varies from industry to industry, and statistics show that the industry with the highest percentage is hospitality/leisure.
About 60% of those paid at or just above the minimum wage in this industry work in restaurants or food service. For a lot of them, decent tips are the only way to make ends meet.
Conclusion
There have been arguments for both lower and higher minimum wages.
Some believe that minimum wage employees cannot keep up with the rising costs and propose that the minimum wage should increase at the same rates as inflation and the cost of living.
In contrast, others say that increasing the minimum wage does more harm than good to the economy.
As long as there are wages, there will always be different opinions on minimum wage laws.
We hope these minimum wage statistics have given you some insights into the different issues, demographics, and disparities in minimum wages across countries, states, and industries.
Sources:
- VCU
- usafacts
- BLS
- thebalance
- USAFacts
- Business Insider
- US Department of Labour
- Epi
- CATO
- ilo
- CNBC
- The Balance Careers
- usafacts
- Statcan
- thebalance
- CATO
- Debt.org
- BLS
