Taking A Closer Look At Wage Inequality On the Minimum Wage Level

Looking at Bureau of Labour Statistics from 2010, almost 6% of workers paid by the hour in the United States were making minimum wage. That’s a vast group who are cleaning our buildings, preparing our food, serving our ice cream, and clerking in our retail shops; notably, the service and hospitality industry is most likely to pay minimum wage, according to the BLS. Yet, minimum wage earners are often left out of conversations about the wage gap, which tend to focus on economic inequalities for college graduates.

There is a substantial and important wage gap at the college-educated level, highlighting the role that both sexism and racism play in compensation for workers. Women earn less than men overall, women of colour and nonwhite women earn even less, and women as a whole are less likely to rise to senior positions and hold them over time. This is a problem. It’s a significant social problem which persists despite legislation, diversity pushes, and other attempts at fixing it.

But it’s also a problem on the minimum wage level, where education also plays a critical role in how much people make. People without a high school diploma are far more likely to end up in this position, while people with diplomas but no higher education are slightly better off. Technical certificates and college degrees help people significantly when it comes to earning more than minimum wage; only about 3% of people with these certifications are in minimum wage employment.

4.4 million people in the United States have earnings at or below the minimum wage level. Most minimum wage workers are young, with teenagers in particular being underpaid. While some might argue that teenagers making less makes sense because they will go on to make more as they develop careers, this assumes that working teens will develop careers, which often requires going to school. This is out of reach for growing numbers of teens as tuition fees spike along with costs for textbooks, living expenses, and the other needs associated with attending college. And why should teens be valued less as workers?

There is a slight gender disparity here; 7% of women earn federal minimum wage or less when contrasted with 5% of men. Similar racial differences can be seen, with whites being generally statistically underrepresented among low-income workers. What these statistics leave out, however, is the vast numbers of people working under the table, many of whom are people of colour and nonwhite people, particularly undocumented immigrants. These workers can be difficult to track and they typically resist attempts to collect data because they are concerned about their safety, and do not want to attract government attention.

Thus, it’s tough to get a hard line on these statistics. Some of this information may be artificially inflated one way or the other because of the difficulty involved in collecting statistics on migrant workers and people who labour without any real record of their activities. They are a shadow population, unaccounted for because they cannot be pinned down.

Basic analyses also don’t look at the huge racial disparities in types of unemployment; whites as a whole, because of the environments they work in, are more likely to have safe working conditions than people of colour and nonwhite people, particularly if they are undocumented.

To make a long story short, these numbers may be even worse than they appear. It’s possible that far more than 6% of wage and salary earners are making minimum wage or close to it, and that the disparities between race and gender in these statistics could be even more striking.

These are important things to discuss, and unfortunately, conversations about wage disparity are often focused on the assumption that wage-earners have college degrees, which leaves out a larger discussion about work in the lower classes. If you come from a family with a limited educational background, you are less likely to go to college. Likewise, coming from a low-income background will have a profound impact on the opportunities you pursue, and people of colour as well as nonwhite people are underrepresented at colleges and universities. For people who don’t have high school diplomas or have a diploma with no other certifications, conversations about what’s happening for people with degrees are largely irrelevant.

It’s also telling that the minimum wage in the United States is not a living wage. In most regions, people working a 40 hour job at the mandated minimum wage could not support themselves on that income, which means they need to seek additional jobs, hope that a second wage earner in the house can make more, or take on other means for providing for their needs. Like relying on credit cards, payday lenders, and alternative credit, which puts them at an increased risk for economic exploitation. With wrecked credit records, people can’t take advantage of economic opportunities that might be provided through government grants and other funding programs intended to take a bite out of inequality, and consequently, people can become trapped in multigenerational poverty.

Discussing both the minimum wage and the demographic disparities among minimum wage earners should be a critical part of larger discussions about compensation, class, and survival. When looking at wage gaps on the higher education level, leaving out the people at the bottom creates an incomplete picture, and makes it hard to discuss the even more myriad complexities that lie just beneath, like how you account for a vast ‘invisible’ workforce of people who are cooking, cleaning, harvesting food, and making garments without the benefit of statistical tracking, because they’re undocumented, afraid, and on the move.