Who benefits from a higher minimum wage? May 11, 2015 5:30pm by Barry Ritholtz Source: Economic Policy Institute Spread the wealth. twitter facebook linkedin What's been said: Discussions found on the web: ironman commented on May 11 Whoops! According to the BLS’ 2014 Characteristics of Minimum Wage Earners report, 21.8% of all those who earn the minimum wage or less are teenagers (Age 16-19), with another 26.9% being Age 20-24, or if you prefer, 48.2% of all minimum wage earners are between the ages of 16 and 24. Simple math then would suggest the average age is a lot closer to 25 than it is to 36…. Quick pro tip: never trust any data published by the Economic Policy Institute – highly unreliable for anything except bias. ilsm commented on May 11 ironman, See table 8 from your link. No one over 54 is counted. What about all those greeters at Wal-Mart? Iamthe50percent commented on May 11 Not so simple math. Of the 16 to 14 group, not many 16 and 16 year olds are likely to be working full time. Just using evidence of my eyes, the over 24 group skews heavily towards over 50. There are some 36 year olds with gray hair but not many. Averaging 50 and 20 comes real close to 36. Quick pro tip: never trust any data from Americans for Prosperity or Bill O’Reilly. Iamthe50percent commented on May 11 Really need an edit button. Of course that should be “16 to 24” group and “16 and 17 year olds” Livermore Shimervore commented on May 11 Quick Pro Tip: never trust any data published by the Govt – highly unreliable… known for revisions, upon more revisions. Whether the average age is 25 or 36 does not change the bigger point: the average minimum wage worker, and contrary to Fox “News” pundits would have us believe, is NOT a teen working at the ice cream shop to buy jeans at Abercrombie. 25 is three years out of college . And a very large % of these workers are well into-adulthood. Which means they have adult expenses, which in turns means that virtually every dime of their minimum wage salary goes right back into the economy. The multiplier for any increase in the minimum wage is a better deal for economy than ANY tax cut (see 2000-2015). If we had any common sense we would have raised the minimum wage to a living wage. Unfortunately we fight economic common sense on the basis of cable “news” allegiance, which is nothing more than special interest kool aide. Rick Caird commented on May 12 Average age is a stupid number. One Walmart greeter, age 70, and 3 20 year old workers would generate an average age of 33.75. Since the minimum wage greeter is just as likely to be doing the job for getting out of the house as he is for the income, it radically skews the statistics and devalues the contribution of the younger workers. It is nonsense, but you buy into it. You then compound your nonsense with the silly claim that there is a multiplier from increasing the minimum wage that is not offset by job and hour losses. Go ask the comic book guy in SFO who just realized the minimum wage increase he voted for will put him out of business because he cannot add $80K to his expenses and remain profitable nor can he cut hours. If we had any common sense, we would put a big, red X through your comment and this whole post would be deleted as misleading. DeDude commented on May 12 @Rick Caird, “minimum wage greeter is just as likely to be doing the job for getting out of the house as he is for the income” In what universe? I think you need to get a little more out and interact with the real world. efrltd commented on May 11 Right on. Whenever I see Economic Policy Institute listed as a source I reach for the salt. You know it’s view is preordained. EPI is a far left DC lobbying group funded by labor unions, not a source of research, just a source of propoganda the unions are pushing today efrltd commented on May 11 Pretty decent spot for spot checking on activist groups. They vet them and don’t just read the “About” tab. https://www.activistfacts.com/organizations/516-economic-policy-institute/ rd commented on May 11 The over-60 crowd has had a very high growth rate of their labor participation rate over the past couple of decades. I suspect many of them are competing with teenagers for minimum wage jobs. http://www.advisorperspectives.com/dshort/commentaries/Aging-Labor-Force.php chartist commented on May 11 This is wage related, but more of a NAFTA issue…I recently worked for a Japanese auto parts supplier. They have four plants in Mexico that pay around $11 per day…When I visited on business I stayed at a Hampton Inn that charged $120 US dollars a night. It takes a Mexican 11 days of pay for one night at the Hampton Inn. It’s clear that exploitation is alive and well in Mexico. Hey, if you want to stop illegal Mexicans crossing the border, pay them a fair wage! There’s obviously two economies in Mexico! chartist commented on May 11 Where I live in NE Cincinnati suburbs, the teenagers come from upper middle class homes, they’re not going to work. The minorities won’t come 20 miles out of Cincinnati to take the jobs, hence they go wanting. But recently, I’ve noticed more 65+ year olds filling the void. kaleberg commented on May 11 The minorities probably don’t have cars for the 20 mile commute. How are the bus routes? Biffah Bacon commented on May 12 Sunset towns as indicated by events of recent years. theexpertisin commented on May 11 This presentation is too general. I would be interested knowing how many minimum wage earners are retirees getting a few extra bucks (plus some exercise and social interaction) over age fifty five. Or, how any folks earning a minimum wage are a spouse getting out of the house to earn cash for some goodies. If someone is between the ages of 24-54 and dependent upon the minimum wage being a primary income, they have made poor life choices during their formative years. If only they had enlisted in the military and learned respect, discipline and a free college education to boot after their tours of duty. Iamthe50percent commented on May 11 Or came back in a bag. they wouldn’t need a job then. hack commented on May 11 Based on the data provided by ironman in the Characteristics of Minimum Wage Workers, 2014, the average age appears to be roughly 32 years old. Additionally, 50.2% of those earning at or below minimum wage are in the Food preparation and serving related occupations. These food prep workers represent 64.7% of all workers earning less than minimum wage (Read: Waiters/Waitresses/Servers). Additionally the report states, “The estimates of workers paid at or below the federal minimum wage are based solely on the hourly wage they report (which does not include overtime pay, tips, or commissions.)” As a result many of the food prep workers (Ex QSR but who would argue a job at MCD is a career not a “stepping-stone” job) actually earn more than minimum wage when tips are factored into the equation. Iamthe50percent commented on May 11 When’s the last time you tipped at McDonald’s or tipped the cashier at WalMart? hack commented on May 12 What about, “(Ex QSR but who would argue a job at MCD is a career not a “stepping-stone” job)” do you not understand! Hint, I said ex quick serve restaurants. I, like others, don’t tip MCD workers. However, if your career at the age of ~35 or older is working at MCD’s, you have issues that will not be fixed by increasing minimum wage. Rather, you are likely to be fired by an increase in wages. Herman Frank commented on May 12 For the love of country and economy, will everybody accept “living wage” as a decent way to lift ALL boats?! I don’t CARE about WHO gets this miserable minimum wage, it is STILL too little! Why does ANYONE with a full-time job need foodstamps et al? Why isn’t their a grain of decency left in the Washington reps to protest loud and fight tooth and nail against a Walmart having so many of its workers on government life-support. Where did we take the wrong cultural corner bashing poor people, unemployed people, people in the wrong industry, and down-and-out people? Where did the empathy go that made a vibrant economy, a vibrant culture, a vibrant community? Don’t you see that 200 million consumers with money in their pocket lift an economy more than 10 underperforming billionaires?! Come on people, make use of those grey cells, don’t think the brainwashed message from the talking heads that “money trickles down”! It DOESN’T! CheeseburgerBob commented on May 12 Looks like it is time to start limiting the comments again. Bad stereotypes, generalizations, math and politics…. tippet523 commented on May 12 having just come back from Australia where the minimum wage is $23/hour it can be done and the jobs will still be there. The difference is nothing is cheap any more with those wages. A couple eggs on toast with coffee ran 20-25 consistently. Soda at a 7-11 was $4.00 Everything that involves labor just costs more. High end things were not much different in price but any of the lower skilled things were expensive. But two minimum wage earners make 90,000 year so much fairer to the worker. Denis Drew commented on May 12 Who WOULD benefit from a higher minimum wage? Here in Chicago, perhaps the 100,000 out of, I would guesstimate 200,000 gang age males who have currently cast their lot with the Criips or the Bloods, etc,, because they wont go to work for $3.50 an hour less then the 1968 minimum wage, double the per capita income later. Ditto for Baltimore, etc. Here in Chicago most minimum wage jobs have been virtually off-shored to Mexico, India, etc. Denis Drew commented on May 12 Who WOULD benefit from a higher minimum wage? Here in Chicago, perhaps the 100,000 out of, I would guesstimate 200,000 gang age, MINORITY males who have currently cast their lot with the Criips or the Bloods, etc,, because they wont go to work for $3.50 an hour less then the 1968 minimum wage, double the per capita income later. Ditto for Baltimore, etc. Here in Chicago most minimum wage jobs have been virtually off-shored to Mexico, India, etc. Low Budget Dave commented on May 12 It amazes me in this day and age that there are still people who seriously argue against raising the minimum wage. When I was growing up, the minimum wage was a basic requirement that businesses pay their fair share. No employee who worked full-time had to rely on government assistance. Now it is built into the business model that employers are entitled to pay as little as possible, (because “jobs”.) I see little pride in such jobs, and little benefit to the community of having them. If someone works 50 hours per week, and can’t even afford to drive to their job (much less rent at a terrible apartment), then that is a bad business model. Economically, we would be better off if we taxed all such businesses the full cost of providing food stamps and subsidized housing to their employees. At least the employees would be getting the welfare instead of the business owners. Livermore Shimervore commented on May 12 @Rick Caird, This is very typical tactic of the right wing you employ, one used by your side in the climate change debate. You guys argue over everything but the main point of the argument in hopes of never addressing it, much to the delight of US Chamber of Congress and other GOP special interest groups that are propping up what’s left of that party. Then the GOP guys ask themselves why they’ve only won more votes than the Dim-ocrats in Presidential contests once over the last six elections… with an even grimmer prospect going forward. Meanwhile minimum wage laws PASS in every red state or blue state that put them on the ballot. But to the non-right wing kool-aide side of the audience: the world’s leading economy has far too many ADULT workers at the minimum wage. Whether ‘average’ is a “stupid” number or not is a stupid argument to be having in the first place. The point of the minimum wage is to ensure that adults working for a living are paid a living wage. Otherwise we have repealed the minimum wage law whole and let the free market (and special interest) set wages for the lowest paid. If teen aged workers living at home benefit from our belief in the minimum wage then bully for them. The the point, impossible for the right wing to grasp, is to make sure that adults can live off their own earned income without relying on tax payers to eat. Your second point is equally stupid. If the minimum wage worker channels all of his new income back into the economy it simply spurs demand in all other areas, (except maybe comic books, sorry Rick Caird). You have no convincing proof that minimum wage increases have HURT GDP at the state or federal level nor do you have proof that it has hurt shareholders of the public companies that benefit from greater consumer spending in aggregate. The economy is a NET WINNER. The right wing’s Pavlovian opposition to increasing the paltry minimum wage is illogical and self-destructive to them on every level, both political and economic. When Bobby Jindal said the GOP needed to stop being the party of stupid, he was equal parts prophet and thinking person. Do us all a big favor Rick, go back to the forum on WND and rail about how unfair it was that right wing lobbying groups dedicated to politics are no longer getting an illegal tax free ride on the backs of the actual tax payers. How terrible when political hacks breaking the law get “targeted: by the IRS. DeDude commented on May 12 Let take another look at the reality of a minimum wage increase: http://ritholtz.com/2015/05/minimum-wages-and-employment-a-case-study-of-the-fast-food-industry/ I mean he just posted this one, why all the right wing BS flowing around – do you have problems with reading or comprehension? Iamthe50percent commented on May 12 Yes, they do. Read this next.March 8, 2016 Highest State Minimum Wages in 2022February 29, 2016 Map: State Minimum Wage LawsNovember 7, 2018 A New Era at Amazon Posted Under Digital Media Wages & Income Previous Post Wealthiest Zip Codes in America Next Post Do Strong Religious Beliefs Stifle Innovation?