Characteristics of Low-Wage Workers and Their Labor Market Experiences: Evidence from the Mid- to Late 1990s. Changes Over Time


  • 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
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.


(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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