Friday, October 10, 2014

Raising the floor: Those who are affected

Who would be affected by raising the minimum wage?

Often critics of raising the minimum wage will couch their criticism behind the idea that minimum wage earners are high schoolers or senior citizens and the wages are used to supplement their income.  The Bureau of Labor Statistics found that this is more or less accurate.  Minimum wage jobs are mostly for young people.  In their study for workers who work for $7.25/hour or less, they found that 50.6% of them are ages 16-24.  30.9% of those who are working at exactly minimum wage are age 16-19 years old.  Of course, this study is only looking at workers earning the federal minimum wage or less but is not looking at workers who are working for slightly more thanks to their state or local municipality raising the minimum wage or for workers who would be directly affected by a raise in the minimum wage.

A liberal think tank, the Economic Policy Institute, tried to look at who would be directly affected by a raise in the minimum wage to $10.10 per hour.  In doing so, they looked at everyone who earned less than $11.10 per hour.  The assumption is that those making a little more than $10.10 would also receive a slight boost (as we discussed above).   According to them, 12.5% of workers directly affected are less than 20 years old.  Beyond that, they found that 13.7% of workers are 55 or older.  36.5% of those who would be directly affected are 20-29 years old.  Nearly three-quarters (73.7%) of those affected by a raise of the minimum wage are between the ages of 20-54.  The average age for those making less than $11.10 per hour is 35 years old.  The report’s author told PolitiFact that when he changed the numbers to those earning within 3% of the state’s minimum wage that the average was 31.  The CBO looked at workers who would earn less than $11.50 per hour under current law in 2016 and found that 88% of them would be 20 or older with only 12% being 16-19. 

The assumption that these jobs are used primarily for supplemental income are created to make sure that people don’t feel bad when they state that they don’t want to raise the minimum wage.  If you can convince people that they don’t really need the money then you can paint those arguing for a minimum wage hike as selfish.  The Economic Policy Institute found that only 14.2% of workers who would be affected by the minimum wage hike work fewer than 20 hours per week.  About 54 percent work full time, as defined as 35 or more hours per week and 32 percent work 20-34 hours per week.  This is also consistent with what the CBO found. They found that 53% of low-wage (earning less than $11.50) would be working 35 or more hours per week.  Those workers affected by the raising of the minimum wage earn on average 50% of their family’s income.  Not surprisingly, the vast majority of those affected by this raise (68.9%) have total family incomes of less than $60,000 per year.  About a quarter (23.1%) of those affected have family incomes below $20,000 per year.  Only 4.5% of those affected have a total family income of over $150,000.  $144,000 is six times the poverty level for a family of four which is where we start to see real income decline because of the wage increase.  Over a quarter (26.1%) of those who would see their wages rise from a minimum wage raise are parents.  Some critics of raising the minimum wage state that those earning minimum wage or just a little more should know that their incomes are not enough to raise a family. Nearly three-quarters of them are not parents showing self-restraint and practicing safe sex even while these same critics advocate for cutting spending on family planning services such as Planned Parenthood, favoring abstinence only sex education (which has proven to be ineffective), praising the decision in the Hobby Lobby case that stopped some coverage of health insurance and contraception, and criticizing health insurance plans that provide free contraception.  That’s probably not relevant, though.

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