New report and interactive map illustrate shocking concentrations of low-wage workers in US states, and expose how people of color and women are vastly overrepresented in jobs paying poverty-level wages. In some states, up to 70% of working women of color earn less than $15.
BOSTON, MA- According to new research from Oxfam America, 31.9 percent of the US labor force, or 51.9 million workers, currently make less than $15 per hour ($31,200 per year), and many are making the federal minimum wage of $7.25 per hour or less. With inflation at a 40-year high, the value of the minimum wage has decreased by at least 21 percent from when it was raised in 2009, leading to a worsening cycle of poverty for many people who provide some of the most essential services in this country.
“It’s been 13 years since Congress raised the wage floor in this country, and in that time all costs of living have steadily climbed. The buying power of the minimum wage simply hasn’t kept up,” said Kaitlyn Henderson, Senior Research Advisor at Oxfam America. “It’s shameful that at a time when many US companies are boasting record profits, some of the hardest working people in this country—especially people who keep our economy and society functioning—are struggling to get by and falling behind.”
The problem is urgent, and the solution is simple: Instituting a universal minimum wage and raising it to $15 per hour would lift millions out of poverty and benefit the US economy. It would also address a widening inequality gap in the US that is impacting people of color and women acutely.
In fact, people of color and women make up a shocking percentage of low-wage workers in the United States. According to the new research based on data modeled from the 5-year American Community Survey (ACS-PUMS) and Current Population Survey (CPS-ORG), while 26 percent of self-identified white workers earn under $15 per hour, 47 percent of self-identified Black people in the workforce make less than $15 an hour. And while 40 percent of self-identified women in the workforce make less than $15 an hour, 25 percent of self-identified working men do. Even more stark, 50 percent of self-identified women of color in the workforce (14.7 million) make less than $15 an hour, and in 25 states, at least 60 percent of working women of color earn under $15. The report also finds well over half of self-identified single parents, 57.5 percent (11.2 million people), make less than $15 an hour.
“Working families, working women, and especially working women of color are barely making ends meet in the face of low wages—despite their inherent worth and dignity, not to mention the tremendous value they create for employers and society,” said Gina Cummings, Vice President of Advocacy, Alliances and Policy for Oxfam America. “Given the surging rate of inflation and the skyrocketing price of gas right now, this is nothing short of an emergency for workers in these jobs.”
Moreover, the report highlights that federal law allows employers to pay wages even lower than $7.25 to certain workers. These subminimum wage workers include student workers, farm workers, domestic workers, and workers with disabilities.
The tipped wage workforce is by far the largest subminimum workforce, at roughly 4.3 million, two-thirds of them women and disproportionately women of color. The federal tipped minimum wage has been stuck at $2.13 an hour since 1991.While employers are obligated to ensure take home wages meet the prevailing minimum wage, enforcement is difficult, which leads to rampant wage theft. Nearly one in six female tipped workers lives in poverty.
Oxfam’s new interactive map illustrates how low-wage workers are concentrated in all 50 states (plus DC and Puerto Rico), with views showing populations by race, gender, age and family status. The US South performs worst, where workers face low state minimum wages, along with the legacy of slavery and structural racism. For example, in Mississippi, 45 percent of the entire workforce earns under $15 an hour; but 63 percent of Black workers earn under $15, and 70 percent of women of color earn under $15.
By contrast, the District of Columbia leads the country with the lowest percentage of workers earning wages under $15 an hour, at 8.5 percent. Washington state has a minimum wage of $14.49, and only 14.2 percent of its workforce earns under $15. Next, California, with its strong minimum wage and equivalent tipped wage, has 17.9 percent of workers earning under $15.
“The impact of these strong wage policies determines whether families can afford to pay their bills and live free of the fear that a single lost paycheck will spell ruin. The difference is powerful,” said Henderson.
To address growing economic inequality and advance racial, gender, and social justice in the United States, the report outlines federal and state-level policies that should urgently be adopted:
Congress should pass the Raise the Wage Act of 2021 and create a universal minimum wage for all workers. Congress should also index wage increases to inflation. Additionally, federal and state governments can incentivize robust living wages, most notably through procurement policies. The Biden administration’s rule requiring $15 per hour for employees of federal contractors, which went into effect on January 30, 2022, is one example of this kind of procurement policy.
At a local level, states should not only raise wages, but they should end policies that prohibit cities and towns from setting minimum wages above state minimums.
Finally, as the report points out, child care is one of the most underpaid professions in the United States. The federal government needs to heavily subsidize the child care and the early learning sector similar to K–12 education in the US.
“It’s long past time to adjust our priorities to reflect the value and decency inherent in all work by paying workers a higher wage, adjusting the compensation of CEOs and shareholders, and moving to an economic model that prioritizes people over profits,” said Cummings.
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Notes to editors
Full report: https://www.oxfamamerica.org/lowwagereport2022
Interactive Map: https://www.oxfamamerica.org/lowwagemap2022
The Oxfam Minimum Wage Model sources microdata from the 5-year Census American Community Survey (ACS-PUMS) to generate a sample of wage earners (a snapshot of people at the national and state level), and employs Current Population Survey (CPS-ORG) March 2021 data as formatted and made available by CEPR to model the hourly wage of these populations.
We use ACS data to gather wages, demographics, and household data. We calculate wages by self-reported income, number of weeks worked, and expected hours per week. This model allows us to observe those locked out of federal minimum wage guarantees either by their exclusion or the practice of wage theft, including tipped wage workers, farmworkers, care workers, students, workers with disabilities, and gig workers. We take at face value the income reported by the individuals themselves. We project 2020 5-year ACS data into 2022 and scale these projections based on Bureau of Labor statistics (BLS) civilian labor force estimates to ensure our numbers are consistent with numbers of workers reported in 2021 state-level statistics. Our projections includes assumptions about demographic shifts using existing models from the census and BLS. Our methodology is based on the need for a universal minimum wage. For more, see our report.