Full Citation

Title: WHO EARNS MINIMUM WAGE IN UTAH?

Citation Type: Miscellaneous

Publication Year: 2006

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: The debate over the minimum wage has continued since before its inception in 1938 through the present with legislation entered into U.S. Congress and several states to raise the wage above the $5.15 level set in 1997. The call to change the minimum wage is driven by its decreasing value over time. Since 1968, the value of the minimum wage has experienced a declining trend punctuated by periodic adjustments, but because the federal minimum wage is set by Congress and is not indexed for inflation its value continues to decline. The decline in the real value of the minimum wage is particularly felt by those who may be supporting a family and earning the minimum rate. From 1959 (when these data began to be collected) to 1981 the minimum wage tracked very closely to the federal poverty level for a family of three. Since 1981, however, the annual earnings of a head of household earning minimum wage have fallen further below this poverty measure. Another trend that began in 1981 is the decreasing number of people earning minimum wages in the United States. This number continues to decline to the point that in 1999 about 2.5 percent of the workforce earned minimum wage and there is evidence that this percentage has continued to decline. The Congress has not increased the minimum wage in over nine years. This is the longest period without an increase since the rate was established at $0.25 in 1938. Several states have decided to change the minimum wage rate in their states well above the federal rate. Currently, 21 states have rates above the federally established rate and six more states will vote on increases in November, 2006. The states with the highest rates are Washington ($7.63) and Oregon ($7.50) with both states’ rates indexed for inflation. An important question in the debate over the minimum wage is who is earning minimum wage? If, as some assume, nearly all minimum wage earners are teenagers working at fast-food restaurants, then increasing the minimum wage will only inflate the price of a combo meal. If this situation is the case then an increase in the minimum wage could mean the loss of jobs for some employees when profits are squeezed by increasing costs of labor. On the other hand, if those earning minimum wage include a significant number of heads of households including single parents, then the level of the minimum wage rate could be vitally important to someone trying to survive on one or more minimum wage jobs. This study seeks to answer the question of who earns minimum wage in Utah by utilizing national Census data, Community Population Survey (CPS) data, Utah Department of Workforce Services (DWS) data and original survey research of Utah’s businesses. National Census data shows that there are approximately two million workers (2.5% of the hourly-paid workforce) who earned minimum wage or less in the United States. The characteristics of these workers is that they tend to be younger (ages 20-24 is the largest group), female (66%), mostly Caucasian (a slightly higher percentage of minimum wage workers are White than the regular hourly-paid workforce), and work part-time. Most minimum wage workers work in food services occupations and most are fairly well educated (29% with high school diplomas and another 34% with some college education). Sixty-five percent of all workers earning minimum wage in the U.S. have never been married. The 2000 Census and DWS data on employment provide information on those earning minimum wages in Utah. The 2000 Census showed that 94,000 Utahns earned minimum wage or less in 1999 and that if the minimum wage rate would have been $7.00 at that time, the number of employees at or below minimum wage would have grown to 178,000. Child care workers, waiters/waitresses (servers) and teaching assistants would have been some of the occupations most likely to receive minimum wages. DWS data for 2006 uses average earnings which would mask those earning wages at the lowest levels, but these data also indicate that if the minimum wage were $7.00 today, 84,000 employees would make wages at or below that rate. A survey conducted in September 2006 of 3,800 Utah businesses was consistent with the information gathered from the Census, CPS and DWS. A very high percentage of those earning minimum wage in Utah work part-time (82%). Only 17 percent were age 19 or younger and most were men (55%). The survey results indicate that highest percentage of minimum wage earners in Utah are White. Minimum wage workers were found primarily in food service with significant numbers in recreation/fitness centers, office maintenance and retail (grocery stores). Most were concentrated along the Wasatch Front with over half in the Salt Lake City metropolitan area. A very large percentage of minimum wage workers were employed by medium-sized businesses (71%).

Url: https://gardner.utah.edu/_documents/publications/workforce/minimum-wage-report.pdf

User Submitted?: No

Authors:

Publisher: University of Utah

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

Countries: United States