Characteristics of Minimum Wage Workers: 2002

According to Current Population Survery estimates for 2002, some 72.7 million American workers were paid at hourly rates, representing 59.6 percent of all wage and salary workers.¹ Of those paid by the hour, about 570,000 were reported earning exactly $5.15, the prevailing Federal minimum wage, and another 1.6 million were reported with wages below the minimum.² Together, these 2.2 million workers with wages at or below the minimum made up 3.0 percent of all hourly-paid workers. Tables 1 - 10 present data on a wide array of demographic and socioeconomic characteristics for these low-wage workers. The following are some highlights from the 2002 data.

• Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and slightly more than one-fourth were age 16-19. Among teenagers, 10 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. However, among those age 65 and over, the proportion was about 5 percent. (See table 1 and table 7.)

• About 4 percent of women paid hourly rates reported wages at or below the prevailing Federal minimum, compared with about 2 percent of men. (See table 1.)

• The proportion of hourly-paid workers receiving $5.15 or less was about 3 percent for whites, blacks, and Hispanics. For whites and Hispanics, women were more likely than men to be low-wage earners. (See table 1.)

• Never-married workers, who also tend to be quite young, are more likely to earn the minimum wage or less than persons who are married. (See table 8.)

• The likelihood of a worker being paid the minimum wage or less is inversely related to the level of education attained. Among hourly-paid workers age 16 and over, a little over 2 percent of those who had a high school diploma but had not gone on to college earned the minimum or less, compared with less than 2 percent for those who had obtained a college degree. (See table 6.)

• Part-time workers (persons who usually work less than 35 hours per week) were much more likely than their full-time counterparts to be paid $5.15 or less (about 8 percent versus about 2 percent). About 1 in 10 workers putting in fewer than 15 hours per week earned the minimum or less. (See table 1 and table 9.)

• By occupational group, the proportion of hourly-paid workers whose earnings were reported at or below $5.15 ranged from a low of less than 1 percent for persons employed in managerial and professional specialty jobs and in precision production, craft, and repair positions, to a high of about 10 percent for those in service jobs. Roughly two-thirds of all low-wage workers in 2002 were in service-type occupations, mostly in food service jobs. (See table 4.)

• Among industry groups, the proportion of workers with reported hourly wages at or below $5.15 was highest in retail trade (about 8 percent), agriculture (about 2 percent), and services (also about 2 percent). About three-fifths of all low-wage workers were employed in retail trade, and nearly one-fourth worked in services. It should be recognized that for many working in these two industries, tips and commissions might supplement the hourly wages received. (See table 5.)

• Among the four broad geographic regions, the West had the lowest proportion of hourly workers with earnings at or below $5.15 (about 2 percent), while the South had the highest (about 4 percent). For a number of States, the proportion of hourly-paid workers earning at or below the Federal minimum wage exceeded the national average; in many other States, the proportion was much lower. Some States have minimum wage laws establishing minimum wage standards that exceed the Federal level of $5.15 per hour. (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 2002 annual averages.

Notes

1 Data are for wage and salary workers, excluding the 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. Indeed, the relatively large number of workers with reported wages below the minimum in 2002 includes almost 500,000 hourly-paid workers reported as earning exactly $5.00 per hour; to some extent, this may reflect rounding in the responses of survey participants. 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 nonhourly 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.

Characteristics of Minimum Wage Workers: 2002, Tables 1 - 10

Characteristics of Minimum Wage Workers: 2002 (PDF 61K)

Last Modified Date: August 8, 2003