Characteristics of Low-wage Workers and Their Labor Market Experiences: Research Brief. Findings

10/26/2004

  • Twenty-eight percent of all workers in March 1996 were low-wage workers, which is consistent with other studies. While this share remained relatively stable throughout the panel, the share of low-wage workers decreased slightly (from 28 percent to 25 percent) through the mid- to late-1990s.
  • Females, African Americans and Hispanics, single parents with children, individuals with health limitations, recent public assistance recipients, and workers in poor households were disproportionately likely to be low-wage workers.
  • Low-wage job and employment spells were typically short. During the study period, the median length of low-wage job spells was about four months. About 80 percent ended within a year, and more than 90 percent ended within two years.
  • There was substantial job mobility among low-wage workers. Many low-wage workers experienced upward mobility (mainly into “medium-wage” jobs) and wage growth during the study period. Still, many workers simply moved in and out of the low-wage labor market during the course of the panel.
  • Upward mobility was more common for those low-wage workers who began the period with better quality jobs (somewhat higher wages, health benefits available, full-time hours) and for those who switched jobs (relative to those still in their starting job).
  • Low-wage workers experienced considerable wage growth during the study period. Average wage increases for low-wage workers were about 25 percent over a three-year period after they started their jobs, or a real wage increase of nearly 8 percent per year. Female workers had lower wages than male workers throughout the follow-up period, but wage growth was similar by gender, as shown in the figure below.

Trends in Real Wages Over Time Among Those Who Started a Low-Wage Job, by Gender

Trends in Real Wages Over Time Among Those Who Started a Low-Wage Job, by Gender. See text for explanation of graph.

Source: 1996 SIPP longitudinal file using workers who started low-wage jobs
within six months after the start of the panel period.

Note: Each bar represents a six-month period.
All wages are reported in 1999 dollars

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