Who earns minimum wage – updated
Bottom Line: Yesterday Amazon.com, the world’s largest retailer, became the latest company to decide on its own to raise the minimum compensation for its employees. I thought it’d be a good time to put minimum wage, as mandated by governments, in perspective.
Four years ago, in the lead up to the 2014 midterm elections, minimum wage was a hot button issue. With the weakest recovery in US history underway under the Obama administration, many sought to have governments mandate higher minimum wages. With Republicans controlling Congress coming out of the cycle it didn’t happen at the federal level, though a smattering of local governments, highlighted by Seattle’s ill-fated decision, did occur. I illustrated the point that the minimum wage argument, really wasn’t about those who earned minimum wage, because very few Americans earned minimum wage to begin with. In 2014, only 1.8% of Americans in the workforce earned minimum wage. Additionally, as I pointed out, the average age of those on minimum wage was 22 and working part-time. But that was four years ago and as we know our economy is in a much better place – in other words, far fewer than 1.8% of Americans are earning minimum wage.
Using data from the Bureau of Labor Statistics .6% of Americans earn minimum wage. That’s zero-point six percent. That’s it. What’s more is that 99% of those who earn minimum wage are under the age of 25. All of this tells you two things. First, those who earn minimum wage aren’t people attempting to raise a family – as is often advanced with the “living wage” crowd. Second, it’s obvious that the government ordering businesses to pay more isn’t needed and isn’t helpful. Ironically, as I’ve also illustrated in times previous, is that those most hurt by artificial government mandates are those who’re the youngest and least skilled. Those who’re most in need of opportunity. It should come as no surprise that without federal mandates to increase the minimum wage but with a booming economy we’ve been able to dramatically reduce the already low number of Americans working for minimum wage.