September 2003, Vol. 126, No. 9
Characteristics of minimum wage workers in 2002
Steven E. Haugen
Economist, Office of Employment and Unemployment Statistics, Bureau of Labor Statistics.
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BLS data on minimum wage earners are derived from the Current Population Survey (CPS), a nationwide sample survey of households that includes questions identifying hourly paid workers and their hourly wage rate. In 2002, some 72.7 million American workers—roughly 3 out of 5 wage and salary workers—were paid at hourly rates.1 Of those paid by the hour, about 570,000 were reported as 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 (also referred to here as low wage workers) made up 3.0 percent of all hourly paid workers. What follows are some highlights from the 2002 data (annual averages). Additional details can be found on the BLS website.3
1 These 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 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 table 1 pertain to workers paid at hourly rates; salaried and other nonhourly workers are excluded. Accordingly, 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, the Bureau of Labor Statistics does not routinely estimate hourly earnings for nonhourly workers, because of concerns that arise in producing these estimates from the data. For further information, see Steven E. Haugen and Earl F. Mellor, "Estimating the number of minimum wage workers," Monthly Labor Review, January 1990, pp. 70–74.
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