Chapter III.
Characteristics of Low-wage Workers and Their Jobs
[ Main page of Report |
Contents of Report ]
-
Size of the Low-Wage Population
-
Demographic Characteristics of Low-Wage Workers
-
Individual Characteristics
-
Household Characteristics
-
Changes Over Time
-
Typologies of Low-Wage Workers
-
Job and Overall Employment Characteristics of Low-Wage
Workers
-
Hourly Wages
-
Hours Worked Per Week
-
Weekly Earnings
-
Availability of Health Insurance Coverage
-
Self-Employment Status
-
Occupations, Industries, and Union Membership
-
Other Employment-Related Characteristics
-
Changes Over Time
In this chapter, we use nationally representative March cross-sectional samples
of workers from the mid- to late 1990s to address these questions: What has
the size of the low-wage working population been since the passage of PRWORA
in 1996? Who are low-wage workers, and how do they compare to medium- and
high-wage workers? What are the characteristics of jobs that low-wage workers
hold? Did the characteristics of low-wage workers and their jobs change between
1996 and 1999?
For most of the analysis, we use a March 1996 cross-sectional sample for
several reasons, including the fact that it is the earliest month in the
SIPP data that is covered for all sample members (see Appendix A). However,
we also conducted some analyses using the March 1997 to March 1999
cross-sectional samples to examine changes in the prevalence and characteristics
of low-wage workers over time. To place our findings in perspective, we also
present descriptive statistics for all workers and for medium- and high-wage
workers.(7) Unless otherwise noted, all figures
were calculated using our primary definition of low-wage workers: those with
a wage below which a full-time worker would have annual earnings below poverty
for a family of four ($7.50 in 1996, $7.72 in 1997, $7.91 in 1998, and $8.03
in 1999). All figures were calculated using the respective calendar year
weights. Appendix B contains tables supplemental to those in the text of
this chapter.
Because the mid- to late 1990s was a period of strong economic growth with
low inflation, our findings must be interpreted carefully. The national
unemployment rate decreased from 7.5 percent in 1992 (a period of recession)
to 5.4 percent in 1996, and it decreased further to 4.0 percent in 2000,
which is low by recent historical standards (see Figure
III.1).(8) Thus, the characteristics of low-wage
workers during our period of investigation may be somewhat atypical as it
may include some workers who were previously unemployed or out of the labor
force. Examining trends in the characteristics of low-wage workers and their
jobs using earlier SIPP cohorts is beyond the scope of this study. However,
we did examine changes in the composition of the low-wage labor market between
1996 and 1999 as the economy improved.
As discussed later, we found that the characteristics of the low-wage population
did not change during this period, suggesting that our findings may be
representative of low-wage workers in general.
[ Go to Contents ]
The share of all workers who were low-wage workers was 28 percent in March
1996 (or nearly 29 million workers, Figure III.2). It decreased slightly
to 27 percent in March 1997 and to 25 percent in March 1998 and March 1999.
These estimated shares are similar to those found in previous studies (discussed
in Chapter II) that used a similar cutoff value to
define low-wage workers. For example, using March CPS data, Bernstein and
Hartmann (2000) found that 29 percent of all workers in 1997 were low-wage
workers, and Mitnik et al. (2002) found a corresponding figure of 25 percent
in 2001.
The slight decrease in the size of the low-wage population after 1996 may
be due to declines in the unemployment rate during that period, suggesting
that some low-wage workers may have been able to find higher-paying jobs
because of the tight labor market. This interpretation is consistent with
findings in the literature that the real wages of low-skilled male and female
workers increased starting in the mid-1990s as a result of the strong economy
(Card and Blank 2000; and Mishel et al. 2001).
Most workers in the mid- to late 1990s were medium-wage workers (Figure III.2).
These workers are defined as those whose hourly wages were between one and
two times the low-wage cutoff (for example, those who earned between $7.50
and $15 per hour in 1996). Roughly equal numbers were low-wage and high-wage
workers (Figure III.2). For example, in March 1996, 43 percent of all workers
were medium-wage workers (about 44 million workers), 28 percent were low-wage
workers (about 29 million workers), and 29 percent were high-wage workers
(the 31 million workers who earned at least $15 per hour). Interestingly,
the slight decrease in the share of low-wage workers between 1996 and 1999
was offset by small increases in both the medium- and high-wage sectors.
The size of the low-wage labor market differs substantially according to
the definition used to identify low-wage workers (Table III.1). These
definitions, described in greater detail in Chapter II, include identifying
low-wage workers using the minimum wage, the 20th percentile of the wage
distribution, annual earnings relative to the poverty level, and those with
low education levels. The estimated fraction in the low-wage labor market
according to these definitions range from 7 percent to 44 percent of workers.
We briefly describe these findings below:
Table III.1.
Percentage Of All Workers In March 1996 Who Were Low-Wage Workers,
According To Alternative Definitions Of Low-Wage Workers
| Wage Type |
Hourly Wage Cutoff Usedfor the Study($7.50) |
Hourly Wage Below MinimumWage($4.75) |
Hourly Wage Below 20th Percentile ($6.57) |
Annual Earnings Below PovertyCutoff ($15,150)(a) |
Low Education Level(b) |
| Percent of All Workers Who Are: |
| Low-Wage Workers |
28 |
7 |
20 |
32 |
44 |
| Medium-Wage Workers(c) |
43 |
35 |
20 |
34 |
30 |
| Higher-Wage Workers(c) |
30 |
58 |
60 |
34 |
26 |
| Sample Size |
30,730 |
30,730 |
30,730 |
32,014 |
32,014 |
Source: 1996 SIPP files using
a March 1996 cross-sectional sample.
Note: All figures are weighted using the 1996 calendar year weight.
a. Annualized earnings are calculated as total monthly earnings
from all jobs and businesses in March 1996 multiplied by 12.
b. Low-wage workers are defined as those with a high school
degree or less, medium-wage workers as those who had some college education,
and higher-wage workers as those with a B.A. degree or more.
c. Medium-wage workers are defined as those with wages/earnings
that are between one and two times the level of the low-wage definition,
and higher-wage workers are defined as those with wages/earnings that are
greater than twice the level of the low-wage definition. |
-
Only 7 percent of all workers were in the low-wage labor market
if these workers are identified as those earning less than the minimum
wage — $4.75 per hour. Using the minimum wage threshold,
about 58 percent of those employed were high-wage workers (defined as those
who earned more than twice the minimum wage). Thus, using the minimum wage
sets the bar very low for defining low-wage workers.
-
As expected, 20 percent of workers are in the low-wage labor
market using the 20th percentile cutoff value of the wage distribution ($6.57
per hour). Thus, using our benchmark $7.50 cutoff value generates
a larger estimate of the size of low-wage population than using the 20th
percentile of the wage distribution as the cutoff value (28 percent of all
workers, compared to 20 percent; Table III.1, columns 2 and
4).(9)
-
About 32 percent were low-wage workers using an annual earnings
below poverty cutoff. This measure defines a low-wage worker
as one whose total monthly earned income from all jobs and businesses multiplied
by 12 was below the annual poverty level for a family of four, and takes
into account both hours worked and hourly
wages.(10) Interestingly, while the 32 percent
figure using the annual earnings measure is similar to our 28 percent benchmark
measure, a significant number of workers are classified as low-wage workers
using one definition but not the other. For example, of all those classified
as low-wage workers using either definition, about 42 percent were
classified as low-wage using one definition but not the other: 18 percent
were classified as low-wage using only our benchmark definition,
and 24 percent were classified as low-wage using only the annual
earnings measure. These discrepancies suggest that there are (1) many workers
with high wages who work only a limited number of hours, and (2) many workers
with low wages who work a substantial number of hours. As discussed, we adopt
the wage-based measure, because our study focuses on low-wage workers rather
than low-income ones.
-
About 44 percent of workers were in the low-wage labor market
if low-wage workers are defined as those with a high school diploma/GED or
less. We believe, however, that the use of this education-based
definition does not adequately characterize the low-wage population, because,
according to our benchmark wage-based definition, nearly 60 percent of those
with a high school credential or less were higher-wage workers. Similarly,
under our benchmark definition, about 18 percent of those who attended college
are classified as low-wage workers.
[ Go to Contents ]
We examined the characteristics of low-wage workers in two interrelated ways.
First, we examined the question: Among all workers within a
particular subgroup, what percentage are low-wage workers? For example,
we calculated the share of all male workers who are low-wage workers and
the share of all workers between ages 30 and 39 who are in the low-wage labor
market. Second, we examined the reverse question: Among all low-wage
workers, what percentage are in a particular subgroup? For example,
we calculated the percentage of all low-wage workers who are male and compared
it to the corresponding shares for all workers and for medium- and high-wage
workers.
An example can be used to explain the difference between the two analyses
and how to reconcile them. As discussed later, in 1996, about 84 percent
of workers younger than age 20 were low-wage workers. However, only about
four percent of all low-wage workers were younger than age 20, because
teenage workers made up only about one percent of the entire labor force.
The two sets of findings can be reconciled by using the result that teenage
workers were four times more likely to be low-wage than higher-wage workers.
Thus, each analysis provides, from a different angle, important descriptive
information on the characteristics of those in the low-wage labor market.
We produced summary statistics for each variable one at a time. In addition,
we conducted a cluster analysis to identify distinct groups of low-wage
workers based on their full set of characteristics. This analysis accounts
for the correlation between variables, and hence, provides a concise typology
of groups of low-wage workers.
Our results on the characteristics of low-wage workers corroborate findings
in the literature that low-wage workers are disproportionately (1) young,
(2) female, (3) nonwhite, (4) with a high school credential or less, (5)
in single-adult households with children, and (6) in households with incomes
below the poverty level. At the same time, however, they are a relatively
diverse group — they exist in a wide range of subgroups defined
by individual and household characteristics.
-
Female workers are more likely than male workers to hold low-wage
jobs. In 1996, more than one-third of all employed females were
in the low-wage labor market, compared to 22 percent of employed males (Figure
III.3 and Table III.2). Importantly, females made up about 57 percent of
all low-wage workers even though they comprised only 46 percent of all workers
(Table III.3). Thus, there were more female than male low-wage workers,
even though there were fewer females than males in the workforce.
These findings are similar to those found in Bernstein and Hartmann (2000)
using March 1997 CPS data. The finding that females make up a larger share
of the low-wage population than males is critical for understanding the
characteristics of low-wage workers, because many of the results discussed
in the rest of this section stem from these gender differences. For example,
low-wage workers are more likely than higher-wage ones to be in single-adult
households with children and to be on public assistance.
Table III.2.
Percentage Of All 1996 Workers Who Were Low-Wage Workers Within Key Worker
Subgroups, By Gender
| Individual Subgroup |
Males(a) |
Females(a) |
Full Sample(a) |
| Percent of All Workers Who Were Low-Wage Workers |
22 |
35 |
28 |
| Age |
| Younger than 20 |
74 |
96 |
84 |
| 20 to 29 |
37 |
46 |
41 |
| 30 to 39 |
19 |
32 |
25 |
| 40 to 49 |
15 |
27 |
21 |
| 50 to 59 |
17 |
30 |
23 |
| 60 or older |
22 |
40 |
30 |
| Race/Ethnicity |
| White and other non-Hispanic |
18 |
32 |
25 |
| Black, non-Hispanic |
34 |
39 |
37 |
| Hispanic |
43 |
52 |
47 |
| Educational Attainment |
| Less than high school/GED |
46 |
71 |
56 |
| High school/GED |
27 |
46 |
36 |
| Some college |
22 |
33 |
27 |
| College graduate or more |
11 |
18 |
14 |
| Has a Health Limitation |
| No |
21 |
33 |
27 |
| Yes |
36 |
52 |
44 |
| Marital Status |
| Married |
16 |
32 |
23 |
| Separated, divorced, widowed |
25 |
34 |
30 |
| Single, never married |
41 |
43 |
42 |
| Region of Residence |
| Northeast |
17 |
28 |
22 |
| South |
20 |
37 |
27 |
| Midwest |
27 |
38 |
32 |
| Northwest |
22 |
32 |
26 |
| Lives in a Metropolitan Area |
| No |
27 |
47 |
36 |
| Yes |
21 |
31 |
25 |
| Sample Size of All Workers |
16,186 |
14,544 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures were weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using
the Hispanic figures, which show that, in 1996, 43 percent of all male Hispanic
workers and 52 percent of all female Hispanic workers were low-wage workers.
|
Table III.3.
Distribution Of Individual Characteristics Of Low- Wage And All Workers In
March 1996, By Gender
| Individual Subgroup |
Males Workers(a) |
Females Workers(a) |
All Workers(a) |
| Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
| Gender |
| Females |
0 |
0 |
100 |
100 |
57 |
46 |
| Males |
100 |
100 |
0 |
0 |
43 |
54 |
| Age |
| Younger than 20 |
5 |
1 |
4 |
1 |
4 |
1 |
| 20 to 29 |
34 |
21 |
27 |
20 |
30 |
20 |
| 30 to 39 |
27 |
31 |
29 |
31 |
28 |
31 |
| 40 to 49 |
19 |
27 |
23 |
29 |
21 |
28 |
| 50 to 59 |
12 |
16 |
14 |
16 |
13 |
16 |
| 60 or older |
3 |
3 |
4 |
3 |
3 |
3 |
| Race/Ethnicity |
| White and other non-Hispanic |
68 |
82 |
76 |
81 |
73 |
81 |
| Black, non-Hispanic |
14 |
9 |
14 |
12 |
14 |
11 |
| Hispanic |
18 |
9 |
10 |
7 |
14 |
8 |
| Educational Attainment |
| Less than high school/GED |
22 |
11 |
17 |
8 |
19 |
9 |
| High school/GED |
43 |
35 |
45 |
34 |
44 |
34 |
| Some college |
17 |
17 |
18 |
19 |
17 |
18 |
| College graduate or more |
18 |
37 |
21 |
40 |
20 |
38 |
| Has a Health Limitation |
| No |
91 |
95 |
91 |
94 |
91 |
94 |
| Yes |
9 |
5 |
9 |
6 |
9 |
6 |
| Marital Status |
| Married |
46 |
66 |
56 |
61 |
52 |
63 |
| Separated, divorced, widowed |
15 |
13 |
21 |
21 |
18 |
17 |
| Single, never married |
39 |
21 |
23 |
18 |
30 |
20 |
| Region of Residence |
| Northeast |
15 |
19 |
16 |
20 |
16 |
20 |
| South |
22 |
25 |
27 |
25 |
25 |
25 |
| Midwest |
42 |
35 |
38 |
35 |
40 |
35 |
| Northwest |
21 |
22 |
19 |
20 |
20 |
21 |
| Lives in a Metropolitan Area |
| No |
27 |
22 |
29 |
22 |
28 |
22 |
| Yes |
73 |
78 |
71 |
78 |
72 |
78 |
| Sample Size |
4,389 |
16,186 |
6,088 |
14,544 |
10,477 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using
the Hispanic figures, which show that 18 percent of all male Low-Wage workers
and 10 percent of all female Low-Wage workers were Hispanic. |
-
Not surprisingly, a much higher share of younger workers than
older ones earn low wages. In March 1996, about 84 percent
of employed teenagers between ages 16 and 19 held low-wage jobs (74 percent
for male teenage workers and 96 percent for female teenage workers; Figure
III.3 and Table III.2). The share of low-wage workers decreased with age
from 41 percent for 20- to 29-year-old workers to 23 percent for 50- to
59-year-old workers, but then increased slightly to 30 percent for those
older than 60. We find a similar pattern for men and women, although low-wage
shares are somewhat higher for women across all age groups. These age profiles
are consistent with economic theory that specifies that worker productivity,
and hence, wages, increase over time as workers accumulate work experience
and job-specific human capital.
-
Because young workers make up only a small percentage of the
full labor force, they constitute only a small fraction of all low-wage
workers. In March 1996, only about 4 percent of all low-wage
workers were teenagers, and 30 percent were ages 20 to 29 (Table
III.3).(11) Thus, about two-thirds of the
low-wage population were prime-age working adults (that is, those at least
30 years old). This occurs because only 1 percent of the entire 1996 labor
force consisted of workers who were teenagers and 20 percent of workers who
were between ages 20 and 29. Thus, although younger workers have a higher
rate of low-wage employment than older workers, the data do not support the
argument that low-wage workers are mainly teenagers and young workers without
family responsibilities.
-
A higher fraction of minority workers than white workers are
in the low-wage labor market. In March 1996, about 25 percent
of white workers held low-wage jobs, compared to 37 percent of African American
and 47 percent of Hispanic workers (Figure III.3 and Table III.2). Stated
another way, about 28 percent of all low-
wage workers were minorities, although minorities made up only 19 percent
of
the workforce (Table III.3).(12) It should
be pointed out, however, that, despite the disproportionate share of minorities
in the low-wage population, nearly three-quarters of all low-wage workers
in March 1996 were white (Table III.3). This finding is due to the fact that
81 percent of workers in the entire labor force were white.
-
Differences in the shares of low-wage workers by education level
are especially large. For example, in 1996, about 56 percent
of workers who did not complete high school were low-wage workers, compared
to 36 percent of workers with a high school diploma or GED, and only about
14 percent of workers who completed college (Table
III.2).(13) The differences are especially
large for females: nearly three-quarters of employed females without a high
school credential held low-wage jobs, compared to only 18 percent of those
who completed college (Table III.2 and Figure III.4).
-
At the same time, however, low-wage workers are diverse in
educational levels. For example, in March 1996, nearly 20 percent
of all low-wage workers graduated college, which is the same figure as the
percentage of all low-wage workers without a high school diploma or GED (Table
III.3). Similarly, about one-quarter of all male high-wage workers were those
with a high school credential or less (Table B.1). Thus, there is not an
exact overlap between low-wage workers and workers with low levels of education.
-
Health status is associated with being a low-wage
worker. Workers in 1996 who reported that they had a physical,
mental, or other health condition that limited the kind or amount of work
that could be done were much more likely to hold low-wage jobs than those
without a health limitation (44 percent, compared to 27 percent; Table
III.2).(14) In addition, more than half of
female workers with a health limitation were in low-paying jobs. However,
only about six percent of the workforce was made up of those with health
problems for both males and females (Table III.3). Consequently, only about
nine percent of all low-wage workers had health limitations.
-
Married workers tend to earn more than those not
married. In 1996, only 23 percent of those married held low-wage
jobs, compared to 30 percent of those separated, divorced, or widowed, and
42 percent of those single and never married (Table III.2). Interestingly,
the differences are much larger for males than females; only 16
percent of married males held low-wage jobs, compared to 32 percent of married
females. These findings by gender suggest that many married women hold secondary
(part-time) jobs to supplement their spouses'
incomes.(15)
-
Despite the overrepresentation of nonmarried workers in the low-wage
population, more than one-half of all low-wage workers are
married. For instance, in March 1996, 52 percent of all low-wage
workers were married (Table III.3). The high share of married workers among
all workers reflects the fact that married workers are the predominant group
of workers in the full labor force (63 percent). These findings further
demonstrate the diversity of the low-wage population.
-
Low-wage workers are roughly proportionately dispersed across
all regions of the country. There is some evidence that low-wage
workers in 1996 were most common in the Midwest and least common in the
Northeast, but the differences are not large (Tables III.2 and III.3).
Interestingly, the distribution of low-wage workers across regions does not
correlate with the magnitude of state unemployment rates across regions (6.5
percent for those in Northwest states, 5.6 percent for those in Northeast
states, 5.2 percent for those in Midwest states, and 4.5 percent for those
in Southern states; not shown). The low-wage worker findings across regions,
however, are consistent with state poverty rates and median incomes across
regions. Specifically, state poverty rates and median incomes were highest
in the Midwest and Northwest regions, the regions in which workers were most
likely to earn low wages (not shown).
-
Low-wage workers are disproportionately concentrated in
nonmetropolitan areas. This result, however, is much more
pronounced for female workers than for male workers. For example, in 1996,
about 47 percent of female workers in nonmetropolitan areas were low-wage
workers, compared to 31 percent of female workers in metropolitan areas (Table
III.2). The corresponding figures for males are 27 nonmetropolitan and 21
percent metropolitan, respectively. Despite these differences, however, because
nearly 80 percent of workers lived in metropolitan areas, nearly three-quarters
of low-wage workers were from them.
-
Workers in households with single adults with children are more
likely to hold low-wage jobs than workers in other types of
households. In March 1996, about 44 percent of female workers
in single-parent households held low-wage jobs (Figure III.5 and Table III.4).
These single parents, who account for a significant share of the TANF population,
make up about 18 percent of all female low-wage workers
(Table III.5).
-
Married male workers have substantially lower rates of low-wage
employment than unmarried male workers. For instance, under
20 percent of married male workers were in low-wage jobs compared with over
30 percent of unmarried male workers (Figure III.5). Interestingly, the marriage
effects for males hold for both those with and without children. The wage
differences between married and unmarried workers are much smaller for female
than male workers.
Table III.4.
Percentage Of All 1996 Workers Who Were Low-Wage Workers Within
Key Household Subgroups, By Gender
(Percentages)
| Individual Subgroup |
Males(a) |
Females(a) |
Full Sample(a) |
| Percent of All Workers Who Were Low-Wage Workers |
22 |
35 |
28 |
| Household Type |
| Single adults with children |
36 |
44 |
42 |
| Married couples with children |
18 |
36 |
26 |
| Married couples without children |
20 |
30 |
25 |
| Other adults without children |
29 |
31 |
30 |
| Household Size |
| 1 |
22 |
26 |
24 |
| 2 |
20 |
30 |
25 |
| 3 |
25 |
37 |
30 |
| 4 or more |
23 |
39 |
30 |
| Age of the Youngest Child in the Household (in
Years for Those with Children) |
| Younger than 3 |
22 |
41 |
30 |
| 3 to 6 |
20 |
41 |
29 |
| 6 to 12 |
18 |
37 |
27 |
| 13 to 18 |
24 |
36 |
30 |
| Other Employed Adult Lives in the Household |
| No |
23 |
35 |
28 |
| Yes |
22 |
34 |
28 |
| Has a Spouse Who Earns (for Those Married) |
| No |
28 |
45 |
33 |
| Yes |
14 |
31 |
22 |
| Received Public Assistance in the Past Year |
| No |
22 |
34 |
27 |
| Yes |
51 |
66 |
58 |
| In Public or Subsidized Housing |
| No |
22 |
34 |
27 |
| Yes |
58 |
73 |
67 |
| Household Income as a Percentage of the Poverty
Level |
| 100 percent or less |
73 |
84 |
79 |
| 101 to 200 percent |
50 |
65 |
57 |
| More than 200 percent |
15 |
26 |
20 |
| Sample Size of All Workers |
16,186 |
14,544 |
30,730 |
Source: SIPP 1996 March cross-sectional
samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using
the household income figures, which show that, in 1996, 73 percent of male
workers and 79 percent of female workers in households with incomes below
the poverty level were low-wage workers. |
Table III.5.
Distribution Of Household Characteristics Of Low- Wage And
All Workers In March 1996, By Gender
(Percentages)
| Individual Subgroup |
Males Workers(a) |
Females Workers(a) |
All Workers(a) |
| Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
| Household Type |
| Single adults with children |
10 |
6 |
18 |
14 |
15 |
10 |
| Married couples with children |
36 |
43 |
39 |
37 |
37 |
40 |
| Married couples without children |
26 |
29 |
25 |
28 |
25 |
29 |
| Other adults without children |
28 |
22 |
18 |
21 |
23 |
21 |
| Household Size |
| 1 |
10 |
10 |
7 |
10 |
8 |
10 |
| 2 |
24 |
28 |
27 |
32 |
26 |
29 |
| 3 |
24 |
22 |
24 |
23 |
24 |
22 |
| 4 or more |
41 |
41 |
41 |
36 |
41 |
39 |
| Age of the Youngest Child in the Household (in
Years for Those with Children) |
| Younger than 3 |
30 |
27 |
25 |
23 |
27 |
25 |
| 3 to 6 |
20 |
21 |
22 |
20 |
21 |
21 |
| 6 to 12 |
28 |
33 |
34 |
35 |
31 |
34 |
| 13 to 18 |
22 |
20 |
20 |
21 |
21 |
20 |
| Other Employed Adult Lives in the Household |
| No |
32 |
31 |
27 |
27 |
30 |
29 |
| Yes |
68 |
69 |
73 |
73 |
70 |
71 |
| Has a Spouse Who Earns (for Those Married) |
| No |
52 |
35 |
23 |
17 |
35 |
27 |
| Yes |
48 |
65 |
77 |
83 |
65 |
73 |
| Received Public Assistance in the Past Year |
| No |
96 |
98 |
96 |
98 |
96 |
98 |
| Yes |
4 |
2 |
4 |
2 |
4 |
2 |
| In Public or Subsidized Housing |
| No |
98 |
99 |
97 |
99 |
98 |
99 |
| Yes |
2 |
1 |
3 |
1 |
2 |
1 |
| Household Income as a Percentage of the Poverty
Level |
| 100 percent or less |
14 |
4 |
12 |
5 |
13 |
5 |
| 101 to 200 percent |
31 |
14 |
27 |
14 |
29 |
14 |
| More than 200 percent |
55 |
82 |
61 |
81 |
59 |
81 |
| Sample Size of All Workers |
4,389 |
16,186 |
6,088 |
14,544 |
10,477 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using the
household type figures, which show that 10 percent of all male low-wage workers
and 18 percent of all female low-wage workers lived in single-adult households
with children. |
-
Workers in larger households are more likely to be in low-wage
jobs, a result driven by females but not males. For instance,
nearly 40 percent of female workers in larger households were in low-wage
jobs compared with about 26 to 30 percent in smaller households (Table III.4).
Interestingly, larger households have higher rates of low-wage employment
than smaller households within each household type (not shown).
For example, in 1996, single-parent female workers with at least three children
were much more likely to hold low-wage jobs than those with fewer children
(57 percent, compared to 40 percent). This result may be due to child care
problems that make it more difficult for women with many children to find
higher-paying jobs or to increase their educational levels. Similarly, low-wage
workers are more prevalent in larger than smaller households without children,
because adults living in multifamily adult households tend to have low incomes
and low educational levels.
-
While the age of the youngest child in the household is not
associated with being a low-wage worker for the full sample, some important
differences exist by household type. The age of the youngest
child is not associated with hourly wages for married workers with children
(Table III.4). However, there is a strong association between child's age
and wage levels for females in single-parent households. Specifically, in
1996, about 61 percent of single-parent female workers whose youngest child
was less than three months old were low-wage workers, compared to only 37
percent for those whose youngest child was a teenager (not shown). Clearly,
these findings are confounded with age effects, because as discussed, young
workers tend to be in the low-wage labor market and are more likely than
older workers to have small children. However, we find similar, although
weaker, associations between the age of the youngest child and being a low-wage
worker using only those single-parent females who were older than age 30.
-
Overall, the presence of employed adults in the household is
not correlated with being a low-wage
worker.(16)
However, married workers tend to earn more if their spouse is employed
than if their spouse is nonemployed. For example, only 14 percent of married
males with a working spouse were in the low-wage labor market in 1996, compared
to 28 percent of those without a working spouse (Table III.4). These unexpected
results are likely due to the higher education levels of workers with employed
spouses than workers with nonemployed spouses. For example, in 1996, about
56 percent of workers with an employed spouse completed more than high school,
compared to 40 percent of those with a nonworking spouse.
-
Not surprisingly, workers in households that receive public
assistance or who live in public or subsidized housing are more than twice
as likely as their counterparts to be low-wage workers. These
findings hold equally by gender (Table III.4). Similarly, being a low-wage
worker is highly correlated with household income for both male and female
workers (Figure III.6 and Table III.4). For example, in 1996, about 79 percent
of those in households with incomes below the poverty level were low-wage
workers, compared to 57 percent for those in households with incomes between
101 to 200 percent of poverty, and only 20 percent for those in households
with incomes more than 200 percent of poverty.
-
At the same time, however, because more than 80 percent of all
workers had household incomes above 200 percent of poverty, nearly 60 percent
of all low-wage workers were in these higher-income households (Table
III.5). Thus, low earners are a diverse group in terms of their
household incomes. Carnevale and Rose (2001) found a similar result using
PSID data: among workers whose annual earnings were less than $15,000, more
than half lived in families with total incomes above $25,000.
Did the characteristics of low-wage workers change between 1996 and 1999
as the unemployment rate decreased and more states implemented PRWORA provisions?
The answer to this question appears to be no. The distribution of low-wage
workers across key subgroups remained reasonably constant over time (Table
III.6). In particular, the fraction of low-wage workers who were female,
young, poor, and in households with single adults with children did not change
appreciably during the mid- to late 1990s. Thus, changes in the unemployment
rate and the implementation of new welfare rules that led many welfare recipients
to leave welfare for work did not appear to affect the composition of the
low-wage population. These results suggest that our empirical results about
the characteristics of the low-wage population may be representative of the
low-wage population under a weaker economy, although fully examining this
issue is beyond the scope of this study.
Thus far, we have examined worker characteristics one at a time. However,
many of these characteristics are highly correlated with each other. Thus,
we conducted a cluster analysis to identify typologies of low-wage workers
using a combination of worker characteristics. In this analysis,
each worker was "optimally" assigned to a cluster on the basis of the similarity
of that worker's characteristics to those of other workers within the cluster.
A distance measure between two workers was constructed by calculating the
sum of squared differences between each of the workers' characteristics.
Workers were then allocated to clusters to minimize the within-cluster variance
and maximize the between-cluster variance. Separate analyses were conducted
for males and females.
Table III.6.
Distribution Of Low-Wage Workers, By Subgroup And Year
| Subgroup |
March 1996(a) |
March 1997(a) |
March 1998(a) |
March 1999(a) |
| Gender |
| Male |
43 |
42 |
42 |
42 |
| Female |
57 |
58 |
58 |
58 |
| Age |
| Younger than 20 |
4 |
4 |
4 |
4 |
| 20 to 29 |
30 |
29 |
28 |
27 |
| 30 to 39 |
28 |
27 |
26 |
26 |
| 40 to 49 |
21 |
22 |
23 |
24 |
| 50 to 59 |
13 |
15 |
15 |
16 |
| 60 or older |
3 |
4 |
4 |
4 |
| Race/Ethnicity |
| White and other non-Hispanic |
73 |
72 |
71 |
72 |
| Black, non-Hispanic |
14 |
14 |
15 |
15 |
| Hispanic |
14 |
14 |
13 |
13 |
| Educational Attainment |
| Less than high school/GED |
19 |
19 |
19 |
18 |
| High school/GED |
44 |
45 |
44 |
43 |
| Some college |
17 |
17 |
17 |
18 |
| College graduate or more |
20 |
20 |
20 |
21 |
| Has a Health Limitation |
| Yes |
9 |
7 |
6 |
6 |
| No |
91 |
93 |
94 |
94 |
| Marital Status |
| Married |
52 |
52 |
52 |
52 |
| Separated, divorced, widowed |
18 |
18 |
18 |
18 |
| Single, never married |
30 |
29 |
30 |
30 |
| Household Type |
| Single adults with children |
15 |
15 |
15 |
15 |
| Married couples with children |
37 |
38 |
39 |
38 |
| Married couples without children |
25 |
27 |
26 |
27 |
| Other adults without children |
23 |
21 |
20 |
21 |
| Household Income as a Percentage of the Poverty
Level |
| 100 percent or less |
13 |
14 |
13 |
12 |
| 101 to 200 percent |
29 |
31 |
31 |
29 |
| More than 200 percent |
59 |
56 |
56 |
59 |
| Sample Size of All Workers |
30,730 |
26,581 |
24,990 |
25,148 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using the
Hispanic figures, which show that 14 percent of all Low-Wage workers were
Hispanic in 1996 and 1997. and 13 percent of all Low-Wage workers were Hispanic
in 1998 and 1999. |
Our cluster analysis revealed that both male and female workers could effectively
be grouped into three clusters that captured the diversity of the low-wage
population (Figure III.7 and Table B.2). The distinguishing features of the
three clusters for males can be described as follows:
-
Young, Single, Educated. These workers are
characterized by their high education levels; about 55 percent attended college
(compared to only 35 percent of all male low-wage workers). A disproportionate
number of these workers are under age 40, white, and unmarried, and nearly
all are from well-to-do households. This cluster contains 39 percent of all
male low-wage workers.
-
Older, Middle-Income, Low-Education, White. In
March 1996, about 84 percent
of these workers were age 30 or older, and 93 percent were white. In addition,
only 23 percent attended college. These workers are concentrated in middle-income
households (those with incomes between one and two times the poverty level).
They account for about 36 percent of all male low-wage workers.
-
Minority, Married, Low-Income, Low-Education.
Nearly all of these workers are minorities (about 95 percent in 1996), and
have low education levels (38 percent were high school dropouts in 1996).
These workers tend to be married (nearly 80 percent in 1996). In addition,
they tend to live in poor households. These workers make up about 25 percent
of the male low-wage worker population.
The three clusters for females can be categorized as follows:
-
Married, Educated, White. These workers are
characterized by their high marriage rates and education levels. In 1996,
more than 80 percent of these workers were married, although many did not
have children. Nearly half had attended college. In addition, the majority
had spouses who worked. Nearly all were white. Not surprisingly, nearly all
of these workers were in households with incomes above twice the poverty
level. Thus, many of these workers are secondary workers who have low-wage
and part-time jobs to supplement their husbands' incomes. These workers account
for the largest share of female low-wage workers — 56
percent in 1996.
-
Older, Middle-Income, Minority. These workers tend
to be older than average, and nearly two-thirds are minorities. Most live
in households with incomes between one and two times the poverty level. In
addition, they tend to be married with children. Their education levels are
typical of other low-wage female workers. This cluster contains about 27
percent of all low-wage workers.
-
Single-Parent, Low-Income. These workers tend to
be single parents and live in poor households. In 1996, more than three-quarters
lived in single-parent households, and about 16 percent received public
assistance in the previous year (compared to only 4 percent of all female
low-wage workers). More than one-half of these workers lived in households
with incomes below the poverty level. Not surprisingly, these workers tend
to have low education levels. However, they are not characterized
by their age or race/ethnicity. In 1996, about 17 percent of all female low-wage
workers were in this cluster.
[ Go to Contents ]
SIPP contains some information on job and business characteristics, including
usual hours per week worked, hourly wages, monthly earnings, occupation,
industry, job tenure, whether health insurance is available on the job, and
union membership status. We followed a similar approach for tabulating these
characteristics as for tabulating workers' demographic characteristics. Our
tables present distributions of job and business characteristics for low-wage
workers, and all workers.(17) Unlike the previous
section, however, we do not present the reverse figures (that is, the share
of low-wage workers among those with a particular job characteristic), because
these figures have less policy relevance. We present figures separately for
males and females and present selected statistics by age. In addition, we
present selected figures for the six (three male and three female) low-wage
worker typologies discussed above.
We find that many low-wage workers receive hourly wages substantially below
the low-wage cutoff value used in our study. In addition, low-wage workers
hold jobs that are markedly less stable and provide fewer benefits than the
jobs higher-wage workers hold. Interestingly, however, most report that they
usually work at least 35 hours per week (that is, full-time). Low-wage workers
are represented in all occupations and industries, but they are
disproportionately found in retail trade industries, service occupations,
and nonunion jobs. In combination, our results are similar to those found
in Acs et al. (2001), Bernstein and Hartmann (1999), Carnevale and Rose (2001),
Mishel et al. (2001), and Mitnik et al. (2002).
-
Many low-wage workers earn considerably less than the low-wage
cutoff value used in this study. As shown in Table III.7, in
March 1996, only 21 percent of low-wage workers earned between $7.00 and
$7.50 (the low-wage threshold value used in this study). More than one-quarter
earned less than $5.00 per hour (which is close to the $4.75 minimum wage).
On average, low-wage workers earned $5.58 per hour, compared to $13.62 for
all workers.(18) Interestingly, the wage
distributions for low-wage workers are similar for males and females. However,
males typically earned more than females among medium- and high-wage workers
(Table B.3).
Table III.7.
Distribution Of Job Characteristics Of Low-Wage And All Workers In March
1996, By Gender
(Percentages)
| Job Characteristics |
Males Workers(a) |
Females Workers(a) |
All Workers(a) |
| Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
| Hourly Wages |
| Less than $5.00 |
26 |
6 |
27 |
9 |
27 |
7 |
| $5.00 to $5.99 |
24 |
5 |
26 |
9 |
25 |
7 |
| $6.00 to $6.99 |
28 |
6 |
27 |
9 |
28 |
8 |
| $7.00 to $7.50 |
22 |
5 |
20 |
7 |
21 |
6 |
| $7.51 or more |
0 |
78 |
0 |
65 |
0 |
72 |
| (Average hourly wage in dollars) |
(5.62) |
(15.38) |
(5.54) |
(11.52) |
(5.58) |
(13.62) |
| Usual Hours Worked per Week |
| 1 to 19 |
3 |
1 |
9 |
6 |
6 |
4 |
| 20 to 34 |
13 |
5 |
25 |
17 |
20 |
11 |
| 35 to 40 |
51 |
50 |
52 |
58 |
52 |
53 |
| More than 40 |
34 |
43 |
14 |
20 |
22 |
33 |
| (Average hours worked) |
(42.9) |
(44.7) |
(35.2) |
(37.7) |
(38.5) |
(41.5) |
| Weekly Earnings |
| Less than $150 |
15 |
4 |
29 |
12 |
23 |
7 |
| $150 to $299 |
64 |
16 |
63 |
27 |
63 |
21 |
| $300 to $600 |
21 |
40 |
8 |
42 |
13 |
41 |
| $600 or more |
0 |
41 |
0 |
19 |
0 |
31 |
| (Average weekly earnings in dollars) |
(240) |
(702) |
(196) |
(443) |
(215) |
(584) |
| Owns Business (Self-Employed) |
18 |
12 |
10 |
7 |
13 |
10 |
| Covered by Health Insurance(b) |
41 |
74 |
57 |
79 |
50 |
76 |
| Sample Size |
4,389 |
16,186 |
6,088 |
14,544 |
10,477 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using
the health insurance figures, which show that 41 percent of all male low-wage
workers and 57 percent of all female low-wage workers had health insurance
coverage through their jobs.
b. SIPP contains information on employer-based health insurance coverage
only for jobs that were in progress at the time of the interview. Thus, the
health insurance figures pertain to jobs held by the March 1996 cross-sectional
sample at the time of their wave 1 interviews. These jobs sometimes differed
from the jobs they held in March 1996. |
-
Low-wage workers between ages 20 and 50 typically earn more than
those younger and older (Figure III.8). However, the wage
differences by age are smaller than expected. For example, in 1996, low-wage
teenagers earned an average of $5.42 per hour, compared to $5.60 for low-wage
workers in their 30s.(19)
-
We find some wage differences across the low-wage worker
typologies. Among low-wage working men, hourly wages tend to
be highest for the young, single, educated group (Table B.4). Similarly,
among low-wage working women, hourly wages tend to be highest for the married,
white, educated group, and to be lowest for the single-parent, low-income
group.
-
Most low-wage workers report working full-time (defined as those
who report usually working at least 35 hours per week; Table III.7 and Figure
III.9). However, they work fewer hours than other workers.
For example, among male workers in March 1996, about 85 percent of those
with low wages worked full-time, compared to 93 percent of all workers (Table
III.7 and Figure III.9).(20) Similarly, about
66 percent of low-wage female workers usually worked full-time, compared
to 78 percent of all employed females. Average hours worked per week, however,
did not vary across the low-wage worker typology groups (Table B.4). It is
interesting to note that, in total, 86 percent of all workers worked full-time
in the strong economy of 1996. This figure is somewhat higher than the 83
percent figure per year between 1985 and 1992 (Statistical Abstract of
the United States).
-
Not surprisingly, the oldest and youngest low-wage workers work
fewer hours than other low-wage workers (not shown). In 1996,
less than two-thirds of teenage and elderly male low-wage workers worked
full-time, compared to 85 percent of other low-wage workers. Similarly, only
about one-half of teenage and elderly female low-wage workers were employed
full-time.
-
The weekly earnings of low-wage workers are typically much lower
than for higher-wage workers (Table III.7). These differences
are primarily due to differences in hourly wage rates but are also due in
part to lower work effort for low-wage employees. In 1996, male low-wage
workers earned an average of only $240 per week, whereas the average U.S.
male employee earned nearly three times more.
(21) Low-wage females typically earn less
than low-wage males (an average of $196 per week for females in 1996, compared
to $240 for males). This is because low-wage females typically work fewer
hours per week, although hourly wages are similar by gender. The weekly earnings
levels of low-wage workers translate into annual earnings well below the
poverty level for both sexes and for each of the low-wage worker typology
groups.
-
Many of those in the low-wage population are covered by health
insurance through their employers, although coverage rates are substantially
lower than for higher-wage workers. For instance, 50 percent
of all low-wage workers had employer-based health insurance coverage compared
with 76 percent of all workers (Table III.7 and Figure III.10). The comparable
figures were about 90 percent for medium-wage workers and 96 percent for
high-wage workers (Table B.3). Interestingly, health insurance coverage rates
for low-wage workers are higher for females than males (57 percent,
compared to 41 percent), although there are no gender differences in the
rates for medium- and high-wage
workers.(23)
-
We also find large differences in employer-based health insurance
coverage rates across the low-wage typology groups. In particular,
among males, coverage rates are much higher for the young, single, educated
group than for the minority, married, low-income, low-education group (46
percent, compared to 35 percent, Table B.4). Differences among females are
more pronounced: the coverage rate for the married, white, educated workers
is 67 percent, compared to only 31 percent for the single-parent, low-income
workers. These major differences reflect differences in the quality of jobs
held by workers across the groups.
-
About 13 percent of low-wage workers in 1996 were self-employed
(that is, owned businesses). Self-employment rates were higher
for males than females (18 percent, compared to 10 percent, Table III.7).
Furthermore, self-employment rates among low-wage workers were somewhat higher
than for all workers, for both males and females. For instance, about 18
percent of low-wage male workers were self-employed, compared to about 10
percent for other male workers. Interestingly, the group of older, middle-income,
and low-education male workers had the highest self-employment rates among
all the low-wage worker typologies (Table B.4).
-
There are some important differences between the employment
characteristics of jobholders and business owners. Average
hourly wages are significantly higher for those with jobs than businesses
($5.75, compared to $4.48 in 1996, Table B.5). Business owners also tend
to work more hours than job holders (44 hours compared to 38 hours for all
low-wage workers in 1996). Health insurance coverage rates are also substantially
higher for those with jobs. Finally, there are some differences across
occupations, as discussed in the next section.
-
Low-wage workers are spread across all occupations and
industries. However, they are substantially overrepresented
in service professions and underrepresented in professional and technical
occupations. In 1996, for example, nearly one-third of all low-wage workers
were in service occupations, compared to only 16 percent of all workers (Table
III.8). Conversely, only 14 percent of low-wage workers were in professional
and technical occupations, compared to 33 percent for all workers.
(24) The share of low-wage workers in
administrative support and clerical, and machine and construction occupations
mirrored the corresponding shares for all workers. Low-wage workers are also
spread across all industries (Table III.8). However, they are most prevalent
in wholesale and retail trades.
-
There are some gender differences across occupations for low-wage
workers. In particular, men are much more likely to be in machine
and construction occupations, whereas women are much more likely to be in
administrative support and clerical ones (Table III.8). We observe some similar
differences by gender across occupation for medium- and high-wage workers
(Table B.3). For instance, among medium- and high-wage workers, men were
more likely than women to be in machine and construction operators (similar
to the pattern for low-wage male workers). In contrast, however, female medium-
and high-wage workers were more likely to be in professional and technical
occupations (Table B.3). There are smaller gender differences, however, across
industries among low-wage workers.
-
We also find differences in occupations across the low-wage worker
typology groups that are consistent with previous findings on hourly wage
rates and the availability of health insurance across these
groups. Specifically, among low-wage workers, the young, single,
educated male workers and the married, white, educated female workers are
much more likely than their counterparts to be in professional and clerical
occupations and less likely to be in service occupations (Table B.4). Thus,
it is not surprising that these workers receive higher wages and are more
likely to have available health insurance than their counterparts.
-
There are substantial differences in the occupations of jobholders
and business owners, although the patterns differ by gender.
For males, business owners are much more likely to be in professional and
technical trades than jobholders, and earn low hourly wages because they
work many hours (Table B.5). Female business owners, on the other hand, are
overrepresented in service occupations (in 1996, one-half of all female business
owners were in service trades, compared to only one-third of female jobholders).
Table III.8.
Distribution Of Occupations, Industries, And Union Membership Of Low-Wage
And All Workers In March 1996, By Gender
(Percentages)
| Job Characteristics |
Males Workers(a) |
Females Workers(a) |
All Workers(a) |
| Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
| Occupation |
| Professional/technical |
14 |
31 |
14 |
36 |
14 |
33 |
| Sales/Retail |
11 |
11 |
16 |
11 |
14 |
11 |
| Administrative support/clerical |
5 |
6 |
20 |
25 |
14 |
15 |
| Service professions/ handlers/ cleaners |
30 |
14 |
36 |
18 |
33 |
16 |
| Machine/construction/production/
transportation |
32 |
35 |
13 |
10 |
21 |
23 |
| Farm/agricultural/other workers |
8 |
4 |
1 |
1 |
4 |
2 |
| Industry |
| Agriculture/forestry/fishing/ hunting |
11 |
7 |
8 |
6 |
9 |
6 |
| Mining/manufacturing/ construction |
20 |
30 |
12 |
14 |
16 |
23 |
| Transportation/utilities |
5 |
9 |
2 |
4 |
3 |
7 |
| Wholesale/retail trade |
27 |
17 |
31 |
18 |
29 |
17 |
| Personal services |
12 |
7 |
12 |
8 |
12 |
7 |
| Health services |
2 |
3 |
10 |
15 |
7 |
8 |
| Other services |
11 |
19 |
22 |
33 |
17 |
26 |
| Other |
12 |
8 |
3 |
2 |
7 |
6 |
| Union Member |
7 |
19 |
6 |
13 |
6 |
16 |
| Sample Size |
4,389 |
16,186 |
6,088 |
14,544 |
10,477 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using the
union figures, which show that seven percent of all male low-wage workers
and six percent of all female low-wage workers were union members. |
-
Low-wage workers are much less likely than higher-wage ones to
be union members. For example, in 1996, about 6 percent of
low-wage workers were union members, compared to 16 percent of all workers
(Table III.8). Among low-wage workers, there were no differences in union
membership by gender. In comparison, medium- and high-wage males were more
likely to be union members than their female counterparts. For instance,
18 percent of medium-wage and 27 percent of high-wage male workers were union
members (Table B.3). The comparable figures for females were 15 and 22 percent,
respectively.
-
Many low-wage workers at a point in time have relatively long
job tenure, but job tenure is typically shorter for low-wage workers than
for all workers. In March 1996, for example, 41 percent of
low-wage wage workers had at least three years of job tenure, compared to
61 percent for all workers (Table III.9). Similarly, average job tenure was
47 months for low-wage workers, compared to 86 months for all
workers.(25) At the same time, a substantial
fraction of low-wage workers have short job tenure. About 35 percent of low-wage
workers had started their jobs within a year prior to March 1996, compared
to 20 percent for all workers. Interestingly, the distribution of months
on the job is similar for low-wage males and females. We emphasize that these
job tenure figures pertain to a cross-sectional sample, and not to an "entry
cohort" sample of low-wage workers who started jobs. The cross-sectional
sample contains workers with longer-than-average job
spells.(26) Consequently, the job tenure figures
are larger than they would be for an entry cohort sample.
-
Only a small percentage of low-wage workers hold more than one
job or business. In 1996, only 8 percent of male and female
low-wage workers held more than one job. This figure is similar to the fraction
of all workers with more than one job (Table III.9). Because relatively few
low-wage workers hold more than one job, statistics on their total hours
worked per week and weekly earnings in all jobs are similar to those presented
above for the primary job (Table III.9).
Table III.9.
Distribution Of Other Employment-Related Characteristics Of Low-Wage
And All Workers In March 1996, By Gender
(Percentages)
| Job Characteristics |
Males Workers(a) |
Females Workers(a) |
All Workers(a) |
| Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
Low-Wage |
All Wage Levels |
| Tenure at Job or Business (Months) |
| Less than 6 |
23 |
11 |
21 |
12 |
22 |
12 |
| 6 to 12 |
12 |
7 |
14 |
9 |
13 |
8 |
| 12 to 24 |
13 |
10 |
15 |
11 |
14 |
11 |
| 24 to 36 |
9 |
8 |
11 |
9 |
10 |
9 |
| Longer than 36 |
43 |
63 |
39 |
58 |
41 |
61 |
| (Average tenure) |
(49) |
(93) |
(47) |
(79) |
(47) |
(86) |
| Working in More than One Job or Business |
8 |
7 |
8 |
7 |
8 |
7 |
| Total Hours Worked per Week in All Jobs and
Businesses |
| Less than 20 |
3 |
1 |
9 |
6 |
6 |
3 |
| 20 to 34 |
12 |
5 |
24 |
16 |
19 |
10 |
| 35 to 40 |
47 |
47 |
49 |
55 |
49 |
50 |
| More than 40 |
38 |
47 |
18 |
24 |
27 |
36 |
| (Average total hours worked) |
(44.8) |
(46.3) |
(36.5) |
(38.8) |
(40.1) |
(42.9) |
| Weekly Earnings from All Jobs and Businesses |
| Less than $150 |
15 |
4 |
28 |
11 |
22 |
7 |
| $150 to $299 |
61 |
15 |
61 |
26 |
61 |
20 |
| $300 to $600 |
24 |
39 |
10 |
43 |
16 |
41 |
| $600 or more |
1 |
42 |
0 |
20 |
0 |
32 |
| (Average weekly earnings) |
(256) |
(717) |
(204) |
(453) |
(227) |
(596) |
| Sample Size |
4,389 |
16,186 |
6,088 |
14,544 |
10,477 |
30,730 |
Source: SIPP 1996 March
cross-sectional samples.
Note: All figures are weighted using the 1996 calendar year weight.
a. The interpretation of the statistics can be illustrated using the
tenure figures, which show that 23 percent of all male low-wage workers and
21 percent of all female low-wage workers started their jobs within six months
of March 1996. |
-
The quality of low-wage jobs improved slightly between 1996 and
1999 as the economy improved (Table III.10). Hourly wages
increased from $5.58 per hour to $5.86 per hour, which is consistent with
findings in the literature that the real wages of low-skilled male and female
workers increased starting in the mid-1990s as a result of the strong economy
(Card and Blank 2000; and Mishel et al. 2001). Similarly, the fraction with
health insurance coverage from the employer increased from 51 to 54 percent.
The distributions of occupations of low-wage jobs remained fairly constant,
although there was a slight increase in the percentage of low-wage workers
in higher-paying professional and technical occupations.
Table III.10.
Distribution Of Key Job Characteristics Of Low-Wage Workers, By Year
| Characteristic |
March 1996 |
March 1997 |
March 1998 |
March 1999 |
| Average Hourly Wage in 1996 Dollars |
5.58 |
5.61 |
5.71 |
5.86 |
| Owns Business (Self-Employed) |
13 |
13 |
13 |
13 |
| Health Insurance Available on the Job |
51 |
53 |
54 |
54 |
| Occupation |
| Professional/technical |
14 |
14 |
14 |
15 |
| Sales/retail |
14 |
14 |
14 |
14 |
| Administrative support/clerical |
14 |
13 |
13 |
13 |
| Service professions/handlers/cleaners |
33 |
33 |
34 |
34 |
| Machine/construction/production/
transportation |
21 |
21 |
21 |
20 |
| Farm/agricultural/other workers |
4 |
4 |
5 |
4 |
| Union Member |
6 |
4 |
4 |
4 |
| Sample Size |
8,530 |
7,091 |
6,258 |
6,150 |
Source: SIPP March 1996 to March
1999 cross-sectional samples.
Note: All figures are weighted using the relevant calendar year weight.
|
[ Go to Contents ]
(7) We refer to the combined group of medium-wage
and high-wage workers as higher-wage workers.
(8) The unemployment rate increased to about 5.8
percent in 2002, but this is beyond the period our data cover.
(9) Using the "relative" wage approach presented
in column 4 of Table III.1, we defined medium-wage workers as those with
wages between the 20th and 40th percentiles of the wage distribution (that
is, between $6.57 and $9.25) and high-wage workers as those with wages above
$9.25. Under our primary wage-based approach, we defined medium-wage workers
as those who earned between $7.50 and $15 per hour, which generates a much
larger estimate of the size of the medium-wage population than using the
relative wage approach (43 percent of all workers, compared to 20 percent)
but a much smaller estimate of the size of high-wage population (30 percent
of all workers, compared to 60 percent).
(10) This estimate is identical to the 1998 estimate
provided by Carnevale and Rose (2001) using the PSID data and a similar
definition of low-wage workers.
(11) In comparison, less than one percent of medium-
or high-wage workers were teenagers; and about 23 percent and 8 percent of
medium-wage workers and high-wage workers, respectively, were ages 20 to
29 (Table B.1).
(12) Bernstein and Hartmann (2000) found similar
results using March 1997 CPS data.
(13) Again, Bernstein and Hartmann (2000) found
similar results.
(14) Using 1996 data from the National Survey of
American Families, Acs et al. (2001) also found a similar result that the
percentage of family heads with a work-limiting health condition was higher
in low-income working families than in higher-income working families (12
percent, compared to 7 percent).
(15) To help disentangle the age findings from
the marriage findings, we also computed low-wage population shares for those
age 30 and older by marital status. These results are similar to those presented
in the tables (not shown).
(16) This finding contrasts with Acs et al. (2000),
who found that low-income working families are much less likely than
higher-income working families to have secondary workers.
(17) A breakdown of characteristics by medium-
and high-wage workers is included in Appendix B.
(18) Medium-wage workers earned an average of about
$11.00 per hour, and high-wage workers earned an average of about $25 per
hour (Table B.3).
(19) We find similar age patterns for males and
females.
(20) For instance, 95 percent of medium-wage workers
and 97 percent of high-wage workers worked at least 35 hours per week (Table
B.3).
(21) The comparable numbers were $495 per week
for male medium-wage workers and $1,217 per week for high-wage workers (Table
B.3).
(22) SIPP contains information on employer-based
health insurance coverage only for jobs that were in progress at the time
of the interview. Thus, the health insurance figures pertain to jobs held
by the March 1996 cross-sectional sample at the time of their wave 1 interviews.
These jobs sometimes differed from the jobs they held in March 1996.
(23) These findings may partly reflect lower rates
of self-employment for low-wage female workers than for low-wage male workers,
as discussed in the next section.
(24) For instance, 22 percent of medium-wage male
workers and 51 percent of high-wage male workers were in professional and
technical occupations (Table B.3). The comparable figures were 35 and 71
percent, respectively, for female workers.
(25) It was 85 months for medium-wage workers and
125 months for high-wage workers (not shown).
(26) For example, among low-wage workers who started
their jobs in March 1992, only those whose jobs lasted for at least four
years would be in the March 1996 cross-sectional sample; workers with shorter
spells would not be included in the cross-sectional sample.
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