Why a white fast-food employee in Mississippi who never started college is the statistical epitome of a low-wage worker
One in four U.S. workers -- or nearly 40 million people -- earn a salary below the federal poverty line of $23,000 for a family of four.* Who are they, where are they, and how does their education differ from the rest of the country? A wonderful new paper from the Economic Policy Institute explains it all.
Let's start with where they work. The Bureau of Labor Statistics counts 22 job categories, ranging from building and grounds maintenance (which employes one in 30 working people) to office and administrative support (which employs one in six). In 2010, the category with the highest share of low-income workers by far -- nearly 75%! -- was food preparation and serving. That was followed by personal care, which also happens to be the fastest growing occupation in the next decade, according to BLS.
The chart below looks at the six occupations with the highest share of low-wage workers (in RED) and also shows you their share of the total workforce (in BLUE). The upshot is that the top six six categories -- each with at least a third of their workers earning less than $23,000 -- make up more than one-third of the economy. Broadly speaking, the occupations with some of the worst pay are local-service jobs, especially in the non-tradable sector.
Where do these workers live? In 2010, Mississippi, Tennessee, and Arkansas had the largest share of people earning sub-povery wages, EPI found. Here's a look at the 10 states with the highest share of workers making less than $23,000. I've also included, in the RED bars, the share of workers in each state making between $23,000 and $46,000. The upshot is that, in these ten states, between 70% and 80% of workers are earning less than $46,000.
Those are awfully low numbers, which might suggest that this data is counting millions of part-time workers. But according to EPI, only 31.5% of low-wage workers they counted lived in households with a
family income greater than $50,000. That suggests "that these low-wage workers are not predominately teenagers living with their parents or adults with
low-paying jobs living with a higher-earning spouse," Rebecca Thiess concludes.
Now let's look at education. Here it's useful to directly compare the "poverty" workforce (those earning less than $23,000 a year) with the total workforce. What you get is a classic argument for the power of education. Four-year graduates are underrepresented in the poverty workforce and less-than-high-school grads are overrepresented in the poverty workforce.
Finally, let's consider the racial breakdown of under-poverty earners, with this graph taken directly from the Economic Policy Institute. We see whites underrepresented and blacks and Hispanics overrepresented in the poverty-wage workforce.
*Note: This is not the same as being technically in poverty, since poverty statistics apply to households, while these statistics apply to individual workers. One household might have two workers earning less than $23,000 but the total household earnings are above the poverty threshold.
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- Economic Policy Institute
- Bureau of Labor Statistics