It’s Getting Harder To Move Beyond A Minimum-Wage Job

By rom FiveThirtyEight

Minimum-wage jobs are meant to be the first rung on a career ladder, a chance for entry-level workers to prove themselves before earning a promotion or moving on to other, better-paying jobs. But a growing number of Americans are getting stuck on that first rung for years, if they ever move up at all.

Anthony Kemp is one of them. In 2006, he took a job as a cook at a Kentucky Fried Chicken in Oak Park, Illinois. The job paid the state minimum wage, $6.50 an hour at the time, but Kemp figured he could work his way up.

“Normally, a good cook would make $14, $15, $17 an hour,” Kemp said. “I thought that of course I’d make a better wage.”

He never did; nine years later, the only raises Kemp, 44, has seen have been the ones required by state law. He earns $8.25, the state’s current minimum wage.

Stories like Kemp’s are becoming more common. During the strong labor market of the mid-1990s, only 1 in 5 minimum-wage workers was still earning minimum wage a year later.1 Today, that number is nearly 1 in 3, according to my analysis of government survey data.2 There has been a similar rise in the number of people staying in minimum-wage jobs for three years or longer. (For a more detailed explanation of how I conducted this analysis, see the footnote below.)3

casselman-feature-minwage-1

Even those who do get a raise often don’t get much of one: Two-thirds of minimum-wage workers in 2013 were still earning within 10 percent of the minimum wage a year later, up from about half in the 1990s. And two-fifths of Americans earning the minimum wage in 2008 were still in near-minimum-wage jobs five years later, despite the economy steadily improving during much of that time.4

casselman-feature-minwage-2

The trend partly reflects the recession and slow recovery, which has broughtweak wage growth for nearly all workers. But it also likely reflects longer-run shifts in the economy that have eroded workers’ bargaining power, particularly for the less-educated. That sense of stagnation may be part of what is fueling the nationwide push for a higher minimum wage, which hasgained significant momentum in recent years. Voters in five states, including Illinois, approved minimum-wage increases last November,5 and several cities, including Seattle, San Francisco and Los Angeles, have passed significant wage hikes. Kemp has joined fast-food workers across the country in demonstrations demanding higher pay as part of the union-backed “Fight for $15” movement.6

“They’re saying that because of the cost of labor and the operating costs they can’t afford to give anyone any raises, but I don’t quite believe that,” Kemp said.

Kemp is representative of the changing minimum-wage workforce in another way as well: At 44 years old, he is one of a growing number of middle-aged minimum-wage workers. Nearly a quarter of the 3.2 million minimum-wage workers in 2014 were over 40; half were 25 or older, up from about 40 percent two decades earlier.7 The face of the minimum wage has changed significantly in recent decades. As a group, today’s minimum-wage workers are far more educated than in the 1980s or 1990s. They are also more likely to be men and more likely to have children. More than half of low-wage workers — significantly more than in past decades — are trying to support themselves, not living with their parents or supplementing a spouse’s income.

casselman-feature-minwage-3-CORRECTED

That profile runs counter to the popular image of minimum-wage workers as mostly teenagers, less-educated immigrants or others trying to break into the workforce. Opponents of a higher minimum wage often warn that setting the wage floor too high could close off opportunities for people looking to gain a foothold in the working world. “Let’s not lock millions of people out of entry-level employment by raising the minimum wage to $15 an hour,” conservative commentator Reihan Salam wrote in Slate earlier this year.

That idea of the minimum wage as a stepping stone hasn’t entirely disappeared. A large, though shrinking, percentage of minimum-wage earners are teenagers, and most of them do move on to better-paying jobs relatively quickly.8 But even young people are finding it harder to escape the minimum wage: More than a quarter of minimum-wage earners under 25 are still making minimum wage a year later, compared with about a sixth in the mid-1990s.

Older minimum-wage workers, perhaps unsurprisingly, face an even tougher time. More than 30 percent of those ages 25 or older are still working for minimum wage after a year. And more than 20 percent of those working for the minimum wage in 2008 were still in such jobs after about three years. Even those who did get raises often didn’t get big ones: Nearly 70 percent were earning within 10 percent of the minimum wage after three years. That suggests that workers who are forced to take low-wage jobs later in life have a particularly hard time escaping them.

casselman-feature-minwage-4

The large number of people getting trapped in entry-level jobs is at least partly the fault of the overall economy. The share of workers staying in low-wage jobs at least a year rose during the 2008-09 recession and has improved only modestly since then. Other research has found that “job ladders” failedin the wake of the recession: Workers were forced into jobs they were overqualified for and then weren’t able to move up into better jobs the way they would during better economic times. And more generally, weak wage growth has been a hallmark of this recovery for workers across the economic spectrum.

But the recession isn’t the entire explanation. Even before the economy collapsed, workers were spending longer in minimum-wage jobs. The decline in manufacturing is likely part of the story: Factories were a key source of well-paying jobs for men without a college education, a group that has become substantially more likely to work in low-wage occupations in recent years. The broader decline of private-sector unions, which helped workers negotiate for higher pay, also likely played a role, argued Cherrie Bucknor, who has studied the changing low-wage workforce for the Center for Economic and Policy Research, a liberal think tank.

A generation ago, someone like Kemp — a widower who never completed high school — might have held a union job in a factory. Today, he is frying chicken for $8.25 an hour with little hope of advancement.

Making ends meet isn’t easy. Kemp’s daily commute is two and a half hours, round-trip, and the train costs $2.25 each way, meaning that he has to work more than half an hour just to pay for his commute. He rents a room from a family in Evanston, north of Chicago, for $150 every two weeks — more than 18 hours of work, pre-tax. Working on his feet all day, he goes through a pair of shoes every two months; good shoes that don’t slip on the greasy kitchen floor can cost $50, six hours of work. He supplements part-time hours from the restaurant with odd jobs handing out fliers for local businesses; even so, he said he has had to borrow money from friends to pay his bills and regularly relies on food pantries when he can’t afford groceries.

“I do like being a cook. … I am grateful for working,” Kemp said. But as someone with a steady job, he said, “In America, we shouldn’t have to stand in food pantry lines every other week to get a handout.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s