The federal minimum wage has been $7.25 per hour since July 24, 2009, the last time Congress raised the pay floor for hourly workers. That marks more than a decade without a raise for the 1.1 million U.S. workers who earn the federally mandated minimum (or less).
Proponents of a higher minimum wage say it would lift millions of low-paid workers out of poverty, including those who currently earn more than the minimum but not enough to support a family. Opponents, meanwhile, argue that minimum wage jobs tend to employ younger, less- skilled workers, and are not intended to be full-time, lifelong jobs. And according to the nonpartisan Congressional Budget Office, increasing the minimum wage could cause lower-paid workers to lose their jobs if employers cut back on hiring because of higher wages.
According to a Pew Research Center Survey, nearly two-thirds of people in the U.S. support raising the minimum wage to $15 per hour.
To understand this issue, it helps to know more about the demographics of minimum wage workers and how these employees fit into the workforce.
What Is the Minimum Wage?
The U.S. had no minimum wage until 1938, when Congress enacted the Fair Labor Standards Act (FLSA), which established said wage, as well as regulations for overtime pay, hours worked, timekeeping, and child labor. Since the advent of the FLSA, Congress has raised the federal minimum wage 22 times.
City and State Minimum Age Rates
Many states have set higher minimum wages than the federal requirement of $7.25 per hour. As of 2021, 29 states and the District of Columbia had higher minimum wages than the federal rate. Five states had no minimum (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee). Two states, Georgia and Wyoming, had minimum wages set lower than $7.25, although workers in both states are entitled to the federal minimum.
Several cities also have set higher minimum wages, including Seattle, San Francisco, and Sunnyvale, California, which, as of January 2021, have minimum hourly wages that exceed $16.
About 40% of all U.S. wage and salary workers live in areas where the federal minimum applies.
Minimum Wages for Tipped Workers
Under the FLSA, workers who earn at least $30 per month in tips may earn a lower minimum wage of $2.13, provided their tips and wage equal the federal minimum of $7.25 per hour. However, many states have set minimum wages for tipped workers that are higher than $2.13 per hour, and some states, including Alaska, California, Oregon, and Washington, require employers to pay the full state minimum wage before tips.
Demographics of a Minimum Wage Worker
Who is the typical minimum wage worker? If you’re picturing a teenager scooping ice cream or serving up fries, think again.
Minimum Wage Workers by Age and Gender
According to the U.S. Bureau of Labor Statistics (BLS), although workers under age 25 represent just under one-fifth of hourly paid workers, they make up nearly half of those paid the federal minimum wage or less.
Women of all ages comprise the larger share of low earners: Nearly 67% of minimum wage workers identify as women, according to BLS data. More than one-third of workers who earn the federal minimum wage are women age 25 or older.
Men comprise slightly more than one-third of minimum wage or sub-minimum wage workers. Men age 25 and older make up just less than 19% of these workers.
The demographics of minimum wage workers helps explain the gender pay gap. According to PayScale data, as of 2021, women earn 82 cents for every dollar earned by a man.
Minimum Wage Workers by Race
The BLS reports that 72.8% of workers who are paid at or below minimum wage identify as White, while 17.7% identify as Black, 18.5% as Hispanic or Latino, and 3.8% as Asian. (Note that percentages do not add up to 100% since respondents of Latino/Hispanic ethnicity may identify as any race.)
For context, the U.S. Census Bureau reports that 76.3% of people identify as White, while 18.5% identify as Hispanic or Latino, 13.4% as Black, and 5.9% as Asian.
Minimum Wage Workers by Industry
If there’s any truth to the stereotype of minimum wage earners, it’s that the majority work in leisure and hospitality. According to the BLS, about three-fifths of workers who earn the federal minimum wage or less work in this industry, mostly in food services. Many of these workers also earn tips.
Trends in Minimum Wage Workers
Over the past decade, the percentage of minimum wage workers has declined slightly from a peak of 59.1% of all wage earners in 2011 to a pre-pandemic low of 58.1% in 2019. During the pandemic, workers paid the minimum wage or less made up 55.5% of earners. This may be because of layoffs and furloughs during lockdowns, which heavily affected the leisure and hospitality industry.
Current and Upcoming Changes in Minimum Wage Law
In 2012, the “Fight for $15” movement was launched by fast-food workers in New York City who demanded a $15-per-hour minimum wage as well as union rights. The fight continues, although some minimum wage workers have reached that hourly threshold, thanks to changes in local, state, and federal laws.
Several states have enacted laws with the goal of increasing the minimum wage to $15 per hour, most often phased in over time. Between 2016 and 2019, New York, New Jersey, Illinois, Maryland, Connecticut, Massachusetts, California, and the District of Columbia passed legislation that gradually will raise the minimum wage in those states to $15 per hour. In 2020, Florida passed “Amendment 2,” which will establish a $15 hourly minimum wage by 2026.
In April 2021, President Joe Biden issued an executive order raising the minimum wage for federal contractors to $15 per hour. The order will affect workers whose employers establish new contracts with the federal government starting January 30, 2022. The minimum wage will then index to inflation. The order will also eliminate the tipped wage for federal contractors by 2024.