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

04/30/2004

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.

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