Life at the Bottom
A female cashier at the McDonalds in Spokane, Washington.
The release of 2012 minimum-wage data last Wednesday—which shows that the number of minimum-wage workers has fallen but is still higher than any period since 1998—has underscored the importance of making good on Obama’s pledge of raising the federal minimum wage from $7.25 to $9 an hour. As many have pointed out, women stand to benefit disproportionately from the increase: Two-thirds of the country’s roughly 1.6 million minimum-wage workers are women.
Perhaps unsurprisingly, the data show that work at the bottom of the pay scale tends to be highly segregated by gender—the three largest occupational groups, making up 67 percent of minimum-wage jobs, are 65 percent female—and includes jobs historically performed by women such as child care and home health services. According to experts, the problem is twofold: While essential, businesses tend to underpay for these types of work, a problem compounded by the fact that workers in them tend to have little economic mobility.
The United States’ transition to a service-based economy—strongly based in retail, health care, recreation, and administration—has destroyed middle-income jobs in favor of low paying ones, and the lowest paying are overwhelmingly worked by women. The largest occupational group at the minimum wage—food services—in which 32 percent of all minimum-wage earners work, is close to 60 percent female. Retail, home to 26 percent of all minimum-wage jobs, employs women at a 65 percent rate. The third largest group, health services—which includes social assistance, hospital jobs, and home health aides—is a remarkable 86 percent female. Often featuring stressful work conditions and lacking benefits, these jobs also tend to be worse paid than low-wage jobs worked mostly by men.
Women working minimum-wage jobs may also be hard pressed to find something that pays better. Women 25 and over who make $7.25 an hour are nearly three-and-a-half times more likely to have never graduated high school than women working for hourly wages in general. They are also more likely to have never been married (28 percent versus 21 percent) or to be either divorced, separated, or widowed (31 percent versus 25 percent). About 17 percent of the women who would be affected by a minimum-wage increase have children and almost a quarter of them are their family’s sole breadwinner, according to David Cooper of the Economic Policy Institute. Female minimum-wage earners also overwhelmingly live in the South, where every state except Florida has a state wage at or below the federal minimum. Women working for the minimum wage are also slightly more likely to be black (19 percent versus 15 percent) or Hispanic or Latino (21 percent versus 17 percent). These jobs are also rarely unionized, making it difficult for workers to negotiate better pay.
Raising the pay for minimum-wage jobs worked primarily by women to the levels in male-dominated fields, such as carpentry, would be one way to help women achieve a better standard of living. With labor economists now close to a consensus that a modest increase in the minimum wage will bring a host of benefits with only a small possibility of higher unemployment, there is no good reason not to start paying more for the essential services provided by minimum-wage workers. Seventy-one percent of Americans agree with this position, according to a recent poll from the Pew Research Center and USA Today, including half of Republicans. On that front, President Obama’s call for a rise in the minimum wage to $9.00 an hour in his State of the Union was a hopeful sign.
Results from a growing body of research show that economic mobility in the United States is among the worst of all developed countries. And within the United States, those in the bottom fifth of income have the least mobility. One way to help women and men at the minimum wage access higher paying job would be to expand vocational training and access to higher education. President Obama’s newly proposed education budget featuring heavier spending on vocational and technical training as well as more money for Pell grants, which help lower-income students, could help. Facilitating transitions into higher-paying jobs at the bottom of the qualifications ladder would be a good idea, too. Jobs such as carpentry, machine operation, and electrical repair all pay higher wages than food service, retail, and health services. Programs such as last year’s $1.8 million Department of Labor grant to help place women in “nontraditional programs” such as welding and masonry, as well as organizations like Nontraditonal Employment for Women should and are helping women who want to make the transition into these higher paying but male-dominated fields.
While it is distressing that minimum-wage jobs are overwhelmingly worked by women, we should be just as concerned about how little those workers make, especially at a time when the richest Americans are doing so well. One year’s earnings at the minimum wage is equal to $15,080, an income that would place a family of three below the poverty line, while the cutoff for the top 1 percent of households in 2011 was about $367,000, or 24 years of full-time work at the minimum wage. Raising the pay for the lowest paid jobs may not close that gap by much, nor would funding education and job training programs through higher taxes on the wealthy immediately generate substantially lower income inequality, but both would be steps in the right direction.
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