President Barack Obama wants to raise the federal minimum wage to $9 per hour from its present $7.25, pushing it again Wednesday as he released his 2014 budget. Proponents predictably argue no one can live on minimum wage. That argument can seem compelling, until you review the actual data.
A new report by the U.S. Bureau of Labor Statistics shows 7.2 percent of Oklahomans working hourly wage jobs are paid minimum wage or less. Put another way, nearly 93 percent of Oklahoma's hourly wage workers are already paid more than minimum wage. That doesn't include salaried employees, just hourly workers. The BLS numbers show the market has mostly boosted the minimum wage already. Obama's proposal is a solution in search of a problem.
That becomes even clearer when you look at who actually earns minimum wage. The BLS notes, “Minimum wage workers tend to be young.” Nationally, about half of minimum-wage employees are younger than 25. Twenty-one percent of teenagers working hourly jobs were paid minimum wage or less, compared with just 3 percent of workers age 25 and older.
The BLS data shows minimum-wage workers are more likely to have less than a high school diploma (not surprising since this includes teenagers). Just 4 percent of those with a high school diploma and only about 2 percent of college graduates worked for minimum wage or less in 2012.
Minimum-wage workers tend to be part-time employees, often concentrated in the leisure and hospitality industries where, the BLS notes, “tips and commissions supplement the hourly wages received.”
The BLS found just 2 percent of married workers earned federal minimum wage or less. Translation: Families rarely depend on minimum wage. In fact, many minimum-wage earners don't “live” on their income at all since they're kids still at home with their parents. To obtain better-paying work, it's important to allow people to first gain skills at lower-paying starter jobs.