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

04/30/2004

  • 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.

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