Characteristics of Minimum Wage Workers: 2004
According to Current Population Survey estimates for 2004, some 73.9 million American workers were paid at hourly rates, representing 59.8 percent of all wage and salary workers.1 Of those paid by the hour, 520,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage, and another 1.5 million were reported earning wages below the minimum.2 Together, these 2.0 million workers with wages at or below the minimum made up 2.7 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 2004 data.
- Minimum wage workers tend to be young. About half of all hourly-paid workers earning $5.15 or less were under age 25, and about one-fourth were age 16-19. Among teenagers, about 9 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was 4 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.)
- Nearly 3 percent of white hourly-paid workers earned $5.15 or less, compared with about 2 percent for both blacks and Hispanics or Latinos. The figure for Asians was about 1 percent. Among whites and Hispanics or Latinos, women were about twice as likely as men to earn the Federal minimum wage or less. (See table 1.)
- Never-married workers, who tend to be young, were more likely to earn the minimum wage or less than persons who are married. (See table 8.)
- Among hourly-paid workers age 16 and over, about 2 percent of those who had a high school diploma but had not gone on to college earned the minimum or less, compared with about 1 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 7 percent versus 1 percent). (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 less than 1 percent for persons employed in management, professional, and related occupations, to about 9 percent for those in service occupations. About three in four workers earning $5.15 or less in 2004 were employed in service 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 leisure and hospitality (about 15 percent). About three-fifths of all workers paid at or below the Federal minimum wage were employed in this industry, primarily in food services and drinking places. For many of these workers, tips supplement the hourly wages received. (See table 5.)
- Among the four broad geographic regions, the West had the lowest proportion of hourly-paid workers with earnings at or below $5.15, at under 2 percent. This compared with about 3 percent for the other regions. In 2004, 24 states and the District of Columbia had a proportion of hourly-paid workers earning at or below the Federal minimum wage that exceeded the national average (2.7 percent); 22 states had a lower proportion. It should be noted that 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 2004 annual averages.
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 2004 includes about 350,000 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 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: 2004, Tables 1 - 10
Characteristics of Minimum Wage Workers: 2004 (PDF 66 K)
Last Modified Date: April 5, 2005