Order Code RL33784
Minimum Wage: Characteristics of
Low-Wage Workers and Their Families
January 8, 2007
Gerald Mayer
Analyst in Public Finance
Domestic Social Policy Division
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division

---

Minimum Wage: Characteristics of
Low-Wage Workers and Their Families
Summary
The basic federal minimum wage of $5.15 an hour has not been raised since
September 1997. Over half the states have established minimum wage rates that are
higher than the federal minimum wage. In the 110th Congress, legislation has been
introduced in the House (H.R. 2) and the Senate (S. 2) that would raise the basic
federal minimum wage in steps from $5.15 to $7.25 an hour. Thus, there is more
than the usual interest in who would benefit directly from an increase in the federal
minimum wage.
The federal minimum wage standard for an individual employee has become
part of the policy discussion about alleviating poverty among families supported by
low-wage workers. It is viewed by some as a tool to encourage labor force
participation among members of low-income families by making work more
financially rewarding. Others assert that raising the minimum wage is not the most
effective way to assist low-income families with earners — in part because many
low-wage workers do not live in low-income families. Accordingly, this report
analyzes not only the individual characteristics of workers by their hourly wage rate,
but also the characteristics of the families in which they live. The report does not
address the arguments of proponents or opponents about the advisability of raising
the minimum wage.
Compared to the typical worker paid an hourly wage, employees who earned
below $7.25 per hour in 2005 were more likely to have been women, of Hispanic
origin, young (i.e., ages 16 to 24) or old (i.e., age 65 and above), lacking a high
school diploma, in service and sales occupations (e.g., waitresses and cashiers,
respectively), working part-time (i.e., less than 35 hours a week), and not represented
by a labor union. A larger proportion of working women than men, young workers
than prime-age workers (i.e., 25 to 54 years old), and part-timers than full-timers, for
example, may gain from a $2.10-an-hour increase in the federal minimum wage.
The families of hourly workers paid less than $7.25 an hour in 2005 more often
were poor, receiving welfare, and lacking health insurance coverage from any source.
Individuals who earned less than $7.25 an hour were more likely than higher-paid
persons to be secondary earners in their families, but a substantial share of low-wage
workers were the sole earners in their families. Some 29% of hourly workers who
earned under $7.25 an hour in 2005 lived in families with incomes of $20,000 or less;
another 26% lived in families with incomes from $20,001 to $40,000. About one-
fourth of these low-wage workers were spouses in married-couple families (with or
without children), and some 13% were single parents. Another 12% were teenagers
(i.e., 16 to 19 years old).
At the other end of the spectrum, 13% of hourly workers paid below $7.25 an
hour lived in families with annual incomes of more than $100,000. In contrast to the
pattern among low-income families, over one-half of the low-wage workers in these
high-income families were teenagers (56%). This report will not be updated.

---

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A Word About the Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A Glimpse of What Follows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Social, Economic, and Demographic Characteristics of Low-Wage Workers . . . 3
Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Race and Hispanic Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Nativity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Full-Time and Part-Time Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Union Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Characteristics of the Families of Low-Wage Workers . . . . . . . . . . . . . . . . . . . . 11
Family Income and Poverty Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Primary and Secondary Earners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Health Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sources of Family Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appendix: Data and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Current Population Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Tables
Table 1. Distribution of Hourly Workers by Gender
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Distribution of Hourly Workers by Race,
Hispanic Origin, and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Distribution of Hourly Workers by Nativity
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 4. Distribution of Hourly Workers by Age
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 5. Distribution of Hourly Workers by Education
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 6. Distribution of Hourly Workers by Occupation
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 7. Distribution of Hourly Workers
by Full-Time or Part-Time Status and Hourly Wage, 2005 . . . . . . . . . . . . . 10
Table 8. Distribution of Hourly Workers by Union Status
and Hourly Wage, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 9. Distribution of Hourly Workers by Family Income, 2005 . . . . . . . . . . 13
Table 10. Distribution of Hourly Workers by Family Poverty Status, 2005 . . . . 14
Table 11. Distribution of Hourly Workers
by Primary and Secondary Earner Status, 2005 . . . . . . . . . . . . . . . . . . . . . . 15

---

Table 12. Distribution of Hourly Workers
by Health Insurance Coverage and Hourly Wage, 2005 . . . . . . . . . . . . . . . 16
Table 13. Distribution of Hourly Workers
by Family Receipt of Welfare, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 14. Distribution of Hourly Workers
by Family Receipt of Unemployment Compensation (UC), 2005 . . . . . . . . 18
Table 15. Distribution of Hourly Workers
by Family Receipt of Workers’ Compensation, 2005 . . . . . . . . . . . . . . . . . 18

---

Minimum Wage: Characteristics of
Low-Wage Workers and Their Families
Introduction
The basic federal minimum wage of $5.15 an hour has not been raised since
September 1997.1 Over half the states have established minimum wage rates that are
higher than the federal minimum wage. In the 110th Congress, legislation has been
introduced in the House (H.R. 2) and the Senate (S. 2) that would raise the basic
federal minimum wage in steps from $5.15 to $7.25 an hour. Thus, there is more
than the usual interest in who would benefit directly from an increase in the federal
minimum wage.2
Accordingly, the first part of this report provides information on the
! demographic and social characteristics (e.g., age, education) of
hourly workers who are paid less than $7.25 an hour, as well as
! the characteristics of the jobs they hold (e.g., occupation and part-
time/full-time hours) and
! the characteristics of the families in which they live (e.g., family
income, welfare receipt).
Some argue that raising the minimum wage is an effective way to alleviate poverty
among families supported by low-wage workers. A higher minimum wage may raise
their incomes and it may encourage greater labor force participation among members
of low-income families. Others assert that raising the minimum wage is not an
effective way to aid low-income families — because many low-wage workers do not
live in low-income families or because many low-income families do not have
earners. Thus, the last section of the report examines characteristics of the families
of low-wage workers.
1 The FLSA calls for lower minimum wage rates for tipped employees, certain new hires
under the age of 20, full-time students who work part-time, and handicapped persons. The
FLSA also includes a number of exemptions from the minimum wage. For additional
information about the federal minimum wage and legislative activity see CRS Report
RL33754, Minimum Wage in the 110th Congress, by William G. Whittaker.
2 In addition to employees who may benefit directly from an increase in the federal
minimum wage, some employees may benefit indirectly. In order to maintain internal
differences in wages between jobs, some firms may raise the wages of workers earning
above the proposed increase in the federal standard.

---

CRS-2
A Word About the Data
This report examines the wages of workers paid by the hour. The data are from
the Current Population Survey (CPS), which is a household survey conducted by the
Census Bureau for the Bureau of Labor Statistics (BLS). Although most workers are
covered by the minimum wage requirements of the FLSA, the CPS does not ask
workers if they are covered by the act.
The Congressional Research Service (CRS) used data from the monthly CPS for
2005 and the March 2006 supplement to the CPS to analyze the wages and family
incomes of hourly workers; that is, employees paid an hourly wage rather than a
weekly or annual salary or a rate based on the quantity of goods or services produced
(i.e., a piece rate).3 The analysis does not include self-employed persons.
As provided in the FLSA, the hourly wage shown in the tables that follow
consists of cash payments only (i.e., the value of employment-based benefits are not
included). A fuller explanation of the data and methodology used in this report
appears in the Appendix.
In this report, hourly workers who earned less than $7.25 an hour in 2005 are
sometimes referred to as low-wage workers. While the phrase was used for the sake
of brevity, it also reflects the fact that in the private sector in 2005, the average wage
of nonmanagement employees was $16.11 an hour according to the BLS survey of
employers.
A Glimpse of What Follows
Compared to the typical worker paid an hourly wage, employees who earned
below $7.25 per hour in 2005 were more likely to have been:
! women,
! of Hispanic origin,
! young (i.e., age 16-24) or old (i.e., age 65 and above),
! lacking a high school degree,
! in service and sales occupations,
! working part-time (i.e., less than 35 hours a week), and
! not represented by a labor union.
The families of these low-wage workers were more likely than other families
in 2005 to have been:
! poor,
! receiving welfare, and
! lacking health insurance coverage from any source.
3 The minimum wage provisions of the FLSA apply to workers paid on an hourly, salary,
or some other basis. (Commerce Clearing House, Labor Law Reporter: Wages Hours,
Chicago: Commerce Clearing House, 2006, p. 38,953.) Thus, some salaried and piece rate
workers may benefit directly or indirectly from an increase in the federal minimum wage.

---

CRS-3
Individuals who earned less than $7.25 an hour were more likely than higher paid
persons to be secondary earners in their families, but a substantial share of low-wage
workers were the sole earners in their families. While low-wage workers in higher
income families very often were teenagers, low-wage workers in lower income
families often were spouses in married couple families (with or without children) or
single parents.
Social, Economic, and
Demographic Characteristics of Low-Wage Workers
This section of the report examines selected demographic and labor market
characteristics of low-wage workers.
Gender
Women were overrepresented among low-wage workers in 2005: almost 7
million of the more than 11 million hourly workers who earned under $7.25 an hour
were women (60.1%); in contrast, women accounted for a smaller share of all hourly
workers (50.2%). (See the top and middle panels of Table 1.) It also appears that
relatively more working women than men might gain from a higher federal minimum
wage. As shown in the bottom panel of the table, 18.1% of all female hourly workers
earned below $7.25 per hour in 2005 compared to only 12.1% of men.
Table 1. Distribution of Hourly Workers
by Gender and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25
Gender
Workers
$7.25
or less
$7.24
and above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Male
37,652
4,563
648
3,915
33,089
Female
37,957
6,859
1,234
5,626
31,098
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Male
49.8%
39.9%
34.4%
41.0%
51.6%
Female
50.2%
60.1%
65.6%
59.0%
48.4%
Percent by Gender
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Male
100.0%
12.1%
1.7%
10.4%
87.9%
Female
100.0%
18.1%
3.3%
14.8%
81.9%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.

---

CRS-4
Race and Hispanic Origin
Minorities — particularly Hispanics — comprised larger shares of workers paid
below $7.25 an hour than they did of all hourly workers in 2005, as can be seen in the
middle panel of Table 2. Hispanics, who may be of any race, and black non-
Hispanics might benefit more than white non-Hispanics from a boost in the federal
minimum wage. Almost 2.5 million out of 12.5 million Hispanics employed on an
hourly basis — or almost one in five — earned less than $7.25 an hour in 2005.
Although relatively fewer black non-Hispanics (16.9%) were paid less than the
proposed minimum wage level, an even smaller proportion of white non-Hispanics
(13.7%) might have seen their pay increase if the federal minimum wage had been
$2.10 per hour higher in 2005. (See the bottom panel of Table 2.)
Table 2. Distribution of Hourly Workers
by Race, Hispanic Origin, and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Race
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
White, Non-Hispanic
49,339
6,760
1,282
5,479
42,579
Black, Non-Hispanic
9,435
1,593
205
1,388
7,842
Hispanic
12,527
2,451
282
2,170
10,076
Other, Non-Hispanic
4,308
618
114
504
3,690
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
White, Non-Hispanic
65.3%
59.2%
68.1%
57.4%
66.3%
Black, Non-Hispanic
12.5%
13.9%
10.9%
14.5%
12.2%
Hispanic
16.6%
21.5%
15.0%
22.7%
15.7%
Other, Non-Hispanic
5.7%
5.4%
6.1%
5.3%
5.7%
Percent by Race and Hispanic Origin
Total
100.0%
15.1%
2.5%
12.6%
84.9%
White, Non-Hispanic
100.0%
13.7%
2.6%
11.1%
86.3%
Black, Non-Hispanic
100.0%
16.9%
2.2%
14.7%
83.1%
Hispanic
100.0%
19.6%
2.2%
17.3%
80.4%
Other, Non-Hispanic
100.0%
14.3%
2.7%
11.7%
85.7%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Nativity
Hourly workers born in a country other than the United States were slightly
overrepresented in the low-wage workforce, with the foreign-born comprising 18.7%
of persons paid under $7.25 per hour in 2005 as opposed to 16.0% of all hourly paid

---

CRS-5
workers.4 (See the middle panel of Table 3.) As shown in the bottom panel of the
table, relatively more foreign-born than native-born workers might gain from a
minimum wage increase (17.7% versus 14.6%, respectively).
Table 3. Distribution of Hourly Workers
by Nativity and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Native-Born or
Hourly
Under
$5.15
$5.16 to
$7.25
Foreign-Born
Workers
$7.25
or less
$7.24
and above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Native Born
63,494
9,284
1,640
7,644
54,210
Foreign Born
12,115
2,139
242
1,896
9,977
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Native Born
84.0%
81.3%
87.1%
80.1%
84.5%
Foreign Born
16.0%
18.7%
12.9%
19.9%
15.5%
Percent by Nativity
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Native Born
100.0%
14.6%
2.6%
12.0%
85.4%
Foreign Born
100.0%
17.7%
2.0%
15.7%
82.3%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Age
According to the data in the middle panel of Table 4, young workers — 16 to
24 year olds — made up a disproportionate share of individuals paid under $7.25 an
hour in 2005. Over one-half of hourly workers paid below the proposed federal
minimum wage were between 16 and 24 years old (27.7%, teenagers; 23.5%, 20-24
year olds). In contrast, these young workers accounted for much smaller proportions
of all hourly workers (7.3%, teenagers; 14.3%, 20-24 year olds).
A substantial percentage of young workers might be affected directly were the
minimum wage ro rise. Nearly three out five teenagers paid an hourly wage might
see their earnings increase if the federal standard goes to $7.25 per hour. Similarly,
one in four workers between 20 and 24 years old might get a pay raise. (See the
bottom panel of Table 4.)
4 In this report, foreign-born persons include both citizens and noncitizens of the United
States. The CPS does not ask noncitizens if they are legal permanent residents,
nonimmigrants who are in the United States temporarily (e.g., visitors or guest workers), or
whether they are in the country without authorization. Therefore, in this report,
foreign-born persons include legal immigrants, legal nonimmigrants, and unauthorized
aliens.

---

CRS-6
An above-average share of older workers also might benefit from an increase
in the wage standard. While 15.1% of all hourly workers were paid under $7.25 per
hour in 2005, 18.2% of workers age 65 and over earned this hourly rate.
Table 4. Distribution of Hourly Workers
by Age and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25
Age
Workers
$7.25
or less
$7.24
and above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
16-19
5,528
3,165
491
2,675
2,363
20-24
10,846
2,682
511
2,171
8,164
25-29
8,692
1,090
229
861
7,602
30-34
8,088
892
144
748
7,195
35-39
7,992
666
106
559
7,326
40-44
8,769
712
101
611
8,056
45-49
8,417
626
100
525
7,792
50-54
7,001
513
64
449
6,488
55-64
8,015
665
79
587
7,350
65 and over
2,261
411
56
355
1,851
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
16-19
7.3%
27.7%
26.1%
28.0%
3.7%
20-24
14.3%
23.5%
27.2%
22.8%
12.7%
25-29
11.5%
9.5%
12.2%
9.0%
11.8%
30-34
10.7%
7.8%
7.6%
7.8%
11.2%
35-39
10.6%
5.8%
5.7%
5.9%
11.4%
40-44
11.6%
6.2%
5.4%
6.4%
12.6%
45-49
11.1%
5.5%
5.3%
5.5%
12.1%
50-54
9.3%
4.5%
3.4%
4.7%
10.1%
55-64
10.6%
5.8%
4.2%
6.1%
11.5%
65 and over
3.0%
3.6%
3.0%
3.7%
2.9%
Percent by Age
Total
100.0%
15.1%
2.5%
12.6%
84.9%
16-19
100.0%
57.3%
8.9%
48.4%
42.7%
20-24
100.0%
24.7%
4.7%
20.0%
75.3%
25-29
100.0%
12.5%
2.6%
9.9%
87.5%
30-34
100.0%
11.0%
1.8%
9.3%
89.0%
35-39
100.0%
8.3%
1.3%
7.0%
91.7%
40-44
100.0%
8.1%
1.2%
7.0%
91.9%
45-49
100.0%
7.4%
1.2%
6.2%
92.6%
50-54
100.0%
7.3%
0.9%
6.4%
92.7%
55-64
100.0%
8.3%
1.0%
7.3%
91.7%
65 and over
100.0%
18.2%
2.5%
15.7%
81.8%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.

---

CRS-7
Education
Educational attainment is considered a proxy for skill level or productivity (i.e.,
output per hour worked), which is difficult to measure directly. Because firms
reward workers based in part on their skill levels, educational attainment usually is
positively related to earnings level (i.e., lower wages are associated with less
schooling). It thus is not surprising that many workers paid below $7.25 per hour
have fairly limited formal education. (See the middle panel of Table 5.) Almost 7
of every 10 low-wage workers in 2005 either lacked a high school diploma or had
completed only high school. In fact, the least educated group was overrepresented
in the low-wage workforce: while employees who did not attend or complete high
school comprised fully 38.1% of hourly workers earning under $7.25 per hour, they
made up just 16.7% of all workers paid on an hourly basis.
Table 5. Distribution of Hourly Workers
by Education and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
$7.25
Hourly
Under
$5.15
$5.16 to
and
Education
Workers $7.25
or less
$7.24
above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Less Than a High School Diploma
12,647
4,350
561
3,789
8,296
High School Graduate
27,622
3,457
548
2,909
24,165
Some College, No Degree
16,857
2,566
536
2,030
14,291
Associate Degree
7,797
504
109
395
7,293
Bachelors Degree
8,485
470
113
357
8,015
Graduate or Professional Degree
2,201
75
15
61
2,126
Percent by Hourly Wage
Total
100.0% 100.0% 100.0% 100.0% 100.0%
Less Than a High School Diploma
16.7%
38.1%
29.8%
39.7%
12.9%
High School Graduate
36.5%
30.3%
29.1%
30.5%
37.6%
Some College, No Degree
22.3%
22.5%
28.5%
21.3%
22.3%
Associate Degree
10.3%
4.4%
5.8%
4.1%
11.4%
Bachelors Degree
11.2%
4.1%
6.0%
3.7%
12.5%
Graduate or Professional Degree
2.9%
0.7%
0.8%
0.6%
3.3%
Percent by Education
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Less Than a High School Diploma 100.0%
34.4%
4.4%
30.0%
65.6%
High School Graduate
100.0%
12.5%
2.0%
10.5%
87.5%
Some College, No Degree
100.0%
15.2%
3.2%
12.0%
84.8%
Associate Degree
100.0%
6.5%
1.4%
5.1%
93.5%
Bachelors Degree
100.0%
5.5%
1.3%
4.2%
94.5%
Graduate or Professional Degree
100.0%
3.4%
0.7%
2.8%
96.6%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.

---

CRS-8
It could be argued that these findings partly reflect the previously discussed
overrepresentation of youth among low-wage workers. Because some of these
youngsters probably are still attending school, they might only briefly be members
of the low-skilled low-wage labor force. As shown in the bottom panel of Table 5,
34.4% of hourly workers ages 16 and older who lacked a high school diploma as of
2005 earned under $7.25 an hour. If, instead, hourly workers ages 25 and older are
examined (not shown in Table 5), thereby limiting the sample to persons more likely
to have completed their schooling, the proportion of workers without a high school
diploma earning below $7.25 an hour drops to 21.6%.5 In other words, perhaps one
of every five “permanently” low-skilled adults paid on an hourly basis might gain
from the proposed $2.10 rise in the federal minimum wage.
Occupation
Most hourly workers employed in jobs that paid less than $7.25 an hour in 2005
were clustered in two occupational groups. As shown in the middle panel of Table
6, the single largest concentration (46.2%) were employed in service occupations
(e.g., food preparation, building cleaning, health care support, personal care, and
protective support). Another 19.2% of low-wage workers were employed in sales
and related occupations (e.g., retail and personal services sales workers). Both these
figures were much larger than the occupational groups’ presence among all hourly
paid workers (22.2% and 10.1%, respectively). Although total employment was
relatively small (an estimated 623,000 hourly workers), the only other occupational
group considerably overrepresented among low-wage hourly workers were farming,
fishing, and forestry occupations (2.1% versus 0.8% for all hourly workers).
According to CRS estimates (not shown in Table 6), one of every two hourly
workers employed in food preparation and service occupations was paid less than
$7.25 an hour in 2005. Half of these workers may be tipped employees (e.g., waiters,
waitresses, hosts, and hostesses) who under the FLSA must be paid at least $2.13 an
hour provided they receive at least $3.12 an hour in tips — for total hourly pay of at
least $5.15.6 Those tipped employees who currently earn less than $7.25 an hour in
wages and tips would likely benefit directly from an increase in the basic minimum
wage to $7.25 an hour. Tipped employees who currently receive more than $7.25 an
hour in wages and tips may not benefit.
A much above-average share of hourly workers in sales occupations might
benefit if the basic federal minimum wage increased to $7.25 an hour. For example,
based on CRS estimates (not shown in Table 6), about two in five cashiers and a
similar share of counter and rental clerks might see their pay increase if the basic
minimum wage is raised by $2.10 an hour. An increase of this size also might affect
5 Data discussed in the text of this report that are not shown in the tables are available from
the authors upon request.
6 The $3.12 amount is commonly called a “tip credit.” Some states allow a smaller tip
credit; others do not allow a credit. For more information on the tip credit, see CRS Report
RL33348, The Tip Credit Provisions of the Fair Labor Standards Act, by William G.
Whittaker.

---

CRS-9
three in ten retail salespersons, door-to-door sales workers as well as news and street
vendors, and telemarketers.
Table 6. Distribution of Hourly Workers
by Occupation and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
$7.25
Hourly
Under
$5.15
$5.16 to
and
Occupation
Workers $7.25
or less
$7.24
above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Management, business, and financial
3,902
146
22
124
3,756
Professional and related
10,366
470
51
419
9,895
Service
16,751
5,279
1,394
3,885
11,472
Sales and related
7,612
2,196
142
2,055
5,415
Office and administrative support
13,318
1,156
98
1,058
12,161
Farming, fishing, and forestry
623
235
14
221
388
Construction and extraction
5,828
261
18
242
5,568
Installation, maintenance, and repair
3,449
104
15
89
3,345
Production
7,658
639
47
592
7,019
Transportation and material moving
6,103
936
80
855
5,167
Percent by Hourly Wage
Total
100.0% 100.0% 100.0% 100.0% 100.0%
Management, business, and financial
5.2%
1.3%
1.2%
1.3%
5.9%
Professional and related
13.7%
4.1%
2.7%
4.4%
15.4%
Service1
22.2%
46.2%
74.1%
40.7%
17.9%
Sales and related1
10.1%
19.2%
7.5%
21.5%
8.4%
Office and administrative support
17.6%
10.1%
5.2%
11.1%
18.9%
Farming, fishing, and forestry
0.8%
2.1%
0.8%
2.3%
0.6%
Construction and extraction
7.7%
2.3%
1.0%
2.5%
8.7%
Installation, maintenance, and repair
4.6%
0.9%
0.8%
0.9%
5.2%
Production
10.1%
5.6%
2.5%
6.2%
10.9%
Transportation and material moving
8.1%
8.2%
4.3%
9.0%
8.0%
Percent by Occupation
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Management, business, and financial 100.0%
3.7%
0.6%
3.2%
96.3%
Professional and related
100.0%
4.5%
0.5%
4.0%
95.5%
Service
100.0%
31.5%
8.3%
23.2%
68.5%
Sales and related
100.0%
28.9%
1.9%
27.0%
71.1%
Office and administrative support
100.0%
8.7%
0.7%
7.9%
91.3%
Farming, fishing, and forestry
100.0%
37.7%
2.3%
35.4%
62.3%
Construction and extraction
100.0%
4.5%
0.3%
4.2%
95.5%
Installation, maintenance, and repair 100.0%
3.0%
0.4%
2.6%
97.0%
Production
100.0%
8.3%
0.6%
7.7%
91.7%
Transportation and material moving 100.0%
15.3%
1.3%
14.0%
84.7%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
1. Service occupations include food preparation, building cleaning, health care support, personal care,
and protective support occupations. Sales and related occupations include sales representatives and
retail sales workers, such as cashiers and counter and rental clerks.

---

CRS-10
Full-Time and Part-Time Status
It is widely thought that workers employed part-time, even when they hold jobs
similar to full-time workers (i.e., persons employed for 35 or more hours a week), are
paid at a lower rate. As a result, part-timers should have a greater propensity for low-
wage employment. As shown in the bottom panel of Table 7, part-time workers
were four times more likely than full-time workers to have earned under $7.25 per
hour in 2005 (35.1% compared to 8.8%). About 6.4 million part-timers, or over one-
half of persons paid below $7.25 an hour, might have gotten a pay raise had the
federal minimum wage under consideration been effective in 2005. (See the top and
middle panels of the table.)
Table 7. Distribution of Hourly Workers
by Full-Time or Part-Time Status and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Full-Time or Part-
Hourly
Under
$5.15
$5.16 to
$7.25
Time
Workers
$7.25
or less
$7.24
and above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Full-time
57,385
5,031
752
4,279
52,354
Part-time
18,225
6,392
1,130
5,261
11,833
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Full-time
75.9%
44.0%
39.9%
44.9%
81.6%
Part-time
24.1%
56.0%
60.1%
55.1%
18.4%
Percent by Full-Time or Part-Time
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Full-time
100.0%
8.8%
1.3%
7.5%
91.2%
Part-time
100.0%
35.1%
6.2%
28.9%
64.9%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Union Membership
Because workers represented by labor unions usually enjoy a wage advantage
over nonrepresented workers, unionized workers should be less prone to low-wage
employment. Indeed, union members were less likely to have earned under $7.25 an
hour in 2005 than were nonmembers (4.3% compared to 16.7%). (See the bottom
panel of Table 8.) In other words, comparatively few workers represented by labor
unions stand to gain from the proposed increase in the federal minimum wage.

---

CRS-11
Table 8. Distribution of Hourly Workers
by Union Status and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25
Union Member
Workers
$7.25
or less
$7.24
and above
Number (1,000s)
Total
75,609
11,422
1,882
9,540
64,187
Union
9,755
418
51
367
9,337
Nonunion
65,854
11,005
1,831
9,173
54,850
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Union
12.9%
3.7%
2.7%
3.8%
14.5%
Nonunion
87.1%
96.3%
97.3%
96.2%
85.5%
Percent by Union Status
Total
100.0%
15.1%
2.5%
12.6%
84.9%
Union
100.0%
4.3%
0.5%
3.8%
95.7%
Nonunion
100.0%
16.7%
2.8%
13.9%
83.3%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Characteristics of the Families
of Low-Wage Workers
While the first part of this report examined characteristics of individual low-
wage workers, the remainder looks at characteristics of the families of low-wage
workers.7 In this report, 82.7% of workers who earned less than $7.25 an hour in
2005 lived in families, where a family is defined as a group of two or more related
people living together.8 Families thus could include a husband and wife with or
without children, a single parent with one or more children, and siblings living with
a grandparent. The remaining 17.3% of low-wage hourly workers examined in this
report lived alone or with unrelated individuals in 2005.
Proponents of a higher minimum wage argue that raising the federal standard
will improve the financial situation of low-income working families.9 Opponents
assert that raising the minimum wage is not the most effective way to assist these
7 The data in Tables 1 through 8 are monthly averages for calendar year 2005 (i.e., an
estimated 75.6 million hourly workers). The 2005 family information in Tables 9 through
15 is for hourly workers in March 2006 (i.e., an estimated 73.8 million hourly workers). See
the Appendix for an explanation of the data and methodology used in this report.
8 A majority of workers who earned $7.25 or more an hour lived in families in 2005
(77.7%).
9 For example, see Economic Policy Institute, EPI Issue Guide: Minimum Wage, available
at [http://www.epi.org/issueguides/minwage/epi_minimum_wage_issue_guide.pdf], p. 6.

---

CRS-12
families because many low-wage workers do not live in low-income families.10 In
addition, an increase in the federal minimum wage will not raise the incomes of low-
income families that have no earners — unless the higher wage standard entices
members of these families to enter the labor force and obtain employment.11 Some
argue, however, that a higher minimum wage could harm low-wage workers and their
families by causing job loss or reducing the rate of low-skilled job creation.12
Family Income and Poverty Status
Over one-half of workers paid less than $7.25 an hour lived in families with
incomes of $40,000 or less.13 (See the middle panel of Table 9.) According to CRS
estimates (not shown in Table 9), about one-fourth (25.9%) of low-wage workers in
families with incomes of $40,000 or less were spouses in married-couple families
(with or without children). Some 13.4% were single parents.14 Another 11.9% were
teenagers.
At the other end of the spectrum, 12.9% of workers who earned less than $7.25
an hour lived in families with annual incomes of more than $100,000. Over one-half
of the low-wage workers in these high-income families were teenagers (55.7%),
according to CRS estimates. Another 13.5% was comprised of husbands or wives
in married-couple families, while just 1.0% were single parents.
10 For example, see Richard V. Burkhauser and Joseph J. Sabia, Raising the Minimum Wage:
Another Empty Promise to the Working Poor, Washington: Employment Policy Institute,
Aug. 2005, pp. 6-9.
11 CRS estimates that, in 2005, about one-half (50.7%) of people ages 16 and older in the
civilian noninstitutional population who lived in poor families (i.e., below the poverty
income level) lived in families with no wage earners. Some 28.4% of people at least 16
years old who lived in near poor families lived in families that lacked wage earners. A near
poor family is a family with income between 1.00 and 1.99 times the poverty level. These
poor families may not have had wage earners because the members were retired, younger
members were in school, working-age members were unemployed, or for other reasons.
12 For different perspectives, see David Neumark and William Wascher, Minimum Wages
and Employment: A Review of Evidence from the New Minimum Wage Research, NBER
Working Paper No. 12663, available at [http://www.nber.org/papers/w12663], Nov. 2006
and Liana Fox, Minimum Wage Trends: Understanding Past and Contemporary Research,
EPI Briefing Paper No. 178, available at [http://www.epi.org/briefingpapers/178/bp178.pdf],
Oct. 2006.
13 Family income includes wages and salaries, self-employment income, Social Security
benefits, Supplemental Security Income, pension payments, interest, dividends, rent,
unemployment compensation, public assistance payments, veterans’ benefits, workers’
compensation, alimony, and child support. It excludes fringe benefits and in-kind transfers
(e.g., for food, housing, or health care). U.S. Census Bureau, Current Population Survey,
2006 Annual Social and Economic (ASEC) Supplement, available at
[http://www.census.gov/apsd/techdoc/cps/cpsmar06.pdf], pp. 9-3 — 9-4.
14 A single parent is defined here as an unmarried head of a “primary” family with at least
one child under the age of 18. See the Appendix for a discussion of primary families.

---

CRS-13
Table 9. Distribution of Hourly Workers by Family Income, 2005
Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Family Income
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
$20,000 or less
11,005
2,931
680
2,251
8,074
$20,001 to $40,000
17,117
2,648
455
2,194
14,469
$40,001 to $60,000
15,163
1,635
180
1,455
13,529
$60,001 to $80,000
11,452
986
91
895
10,466
$80,001 to $100,000
7,320
694
89
605
6,626
Over $100,000
11,742
1,317
223
1,094
10,425
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
$20,000 or less
14.9%
28.7%
39.6%
26.5%
12.7%
$20,001 to $40,000
23.2%
25.9%
26.5%
25.8%
22.8%
$40,001 to $60,000
20.5%
16.0%
10.5%
17.1%
21.3%
$60,001 to $80,000
15.5%
9.7%
5.3%
10.5%
16.5%
$80,001 to $100,000
9.9%
6.8%
5.2%
7.1%
10.4%
Over $100,000
15.9%
12.9%
13.0%
12.9%
16.4%
Percent by Family Income
Total
100.0%
13.8%
2.3%
11.5%
86.2%
$20,000 or less
100.0%
26.6%
6.2%
20.5%
73.4%
$20,001 to $40,000
100.0%
15.5%
2.7%
12.8%
84.5%
$40,001 to $60,000
100.0%
10.8%
1.2%
9.6%
89.2%
$60,001 to $80,000
100.0%
8.6%
0.8%
7.8%
91.4%
$80,001 to $100,000
100.0%
9.5%
1.2%
8.3%
90.5%
Over $100,000
100.0%
11.2%
1.9%
9.3%
88.8%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
The income data in Table 9 do not take into account family size, which can
greatly affect living standards at a given income level. In contrast, Census poverty
income levels vary both by family size and composition. For example, in 2005 the
poverty level for a family of three with one child under age 18 was $15,720. For a
two-person family with a child under age 18, the poverty level was $13,410.15
Table 10 shows the relationship of family income to the poverty level of
income. As shown in the table’s middle panel, hourly workers who earned less than
$7.25 an hour in 2005 were more likely to live in poor families compared to workers
paid at least $7.25 an hour (18.1% versus 6.0%). Hourly workers who earned less
than $7.25 an hour also were more often “near poor” than higher paid workers:
28.9% of workers who earned under $7.25 an hour lived in families with incomes
1 5 U.S. Census Bureau, Poverty Thresholds 2005, availabl e at
[http://www.census.gov/hhes/www/poverty/threshld/thresh05.html].

---

CRS-14
between 1.00 and 1.99 times the poverty level; relatively fewer (16.6%) higher paid
workers lived in near poor families.
Many poor and near poor families might be affected directly by an increase in
the basic federal minimum wage. If the pay of hourly wage workers rises to $7.25
an hour, 32.7% of workers in poor families might benefit. Similarly, 21.9% of
workers in near-poor families stand to gain. (See the bottom panel of Table 10.)
Table 10. Distribution of Hourly Workers
by Family Poverty Status, 2005
Under $7.25 an Hour
Total
Total
Ratio of Family Income
Hourly
Under
$5.15
$5.16 to
$7.25 and
to Poverty Level
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
Below Poverty
5,655
1,849
374
1,476
3,806
1.00 to 1.99
13,515
2,954
569
2,385
10,561
2.00 to 2.99
13,977
1,936
350
1,586
12,041
3.00 to 3.99
12,685
1,183
78
1,104
11,502
4.00 to 4.99
9,742
802
133
669
8,940
5.00 and over
18,225
1,486
213
1,273
16,739
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Below Poverty
7.7%
18.1%
21.8%
17.4%
6.0%
1.00 to 1.99
18.3%
28.9%
33.2%
28.1%
16.6%
2.00 to 2.99
18.9%
19.0%
20.4%
18.7%
18.9%
3.00 to 3.99
17.2%
11.6%
4.6%
13.0%
18.1%
4.00 to 4.99
13.2%
7.9%
7.7%
7.9%
14.1%
5.00 and over
24.7%
14.6%
12.4%
15.0%
26.3%
Percent by Poverty Status
Total
100.0%
13.8%
2.3%
11.5%
86.2%
Below Poverty
100.0%
32.7%
6.6%
26.1%
67.3%
1.00 to 1.99
100.0%
21.9%
4.2%
17.6%
78.1%
2.00 to 2.99
100.0%
13.9%
2.5%
11.3%
86.1%
3.00 to 3.99
100.0%
9.3%
0.6%
8.7%
90.7%
4.00 to 4.99
100.0%
8.2%
1.4%
6.9%
91.8%
5.00 and over
100.0%
8.2%
1.2%
7.0%
91.8%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.

---

CRS-15
Primary and Secondary Earners16
As shown in the middle panel of Table 11, relatively more low-wage than high-
wage hourly workers were the secondary earners in their families (59.1% and 37.1%,
respectively) — which is not surprising given the previously discussed age and
gender composition of hourly workers earning below $7.25 an hour. But, a
substantial proportion of workers paid less than $7.25 an hour were the sole earners
in their families: the paychecks of 32.4% of low-wage hourly workers accounted for
all of their families’ earned income. Some of these sole-earner families might have
income from other sources, however. For example, workers ages 65 or older (who
previously were mentioned as being overrepresented among low-wage workers) may
receive Social Security retirement benefits or private pension payments.
Table 11. Distribution of Hourly Workers
by Primary and Secondary Earner Status, 2005
Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Earner Status
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,0321
9,965
1,667
8,299
63,066
Primary Earner
43,724
4,081
808
3,273
39,643
Sole Earner
27,664
3,232
662
2,570
24,432
Secondary Earner
29,308
5,885
858
5,026
23,423
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Primary Earner
59.9%
40.9%
48.5%
39.4%
62.9%
Sole Earner
37.9%
32.4%
39.7%
31.0%
38.7%
Secondary Earner
40.1%
59.1%
51.5%
60.6%
37.1%
Percent by Primary and Secondary Earner
Total
100.0%
13.6%
2.3%
11.4%
86.4%
Primary Earner
100.0%
9.3%
1.8%
7.5%
90.7%
Sole Earner
100.0%
11.7%
2.4%
9.3%
88.3%
Secondary Earner
100.0%
20.1%
2.9%
17.2%
79.9%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
1. The number of workers in this table is less than the number of workers in other tables in this section
of the report because some hourly workers in March 2006 did not have earnings in 2005.
Health Insurance Coverage
As noted earlier, individual earnings and family income do not include fringe
benefits. Employer-provided health insurance is a large share of employee
16 Primary earners are defined as workers whose wages make up more than half of a family’s
earnings. Sole earners are primary earners who are the only earners in their families.
Secondary earners receive less than half of a family’s earnings.

---

CRS-16
compensation (i.e., wages and benefits) and government-provided health insurance
and health care services are a large share of public expenditures (e.g., for Medicare
and Medicaid). For low-wage workers who buy their own health insurance or pay
for health care out-of-pocket, the high cost may consume much of their income.
Lower-paid workers are less likely than higher-paid workers to have health
insurance coverage. Over one-third of hourly workers who earned less than $7.25
an hour were uninsured throughout 2005, compared to almost one-fifth of workers
with higher hourly wage rates. (See the middle panel of Table 12.) Because some
of the workers classified in the table as being insured might only have been covered
during part of the year, the percentage without insurance at a particular point in 2005
might have been greater than shown below.
Table 12. Distribution of Hourly Workers
by Health Insurance Coverage and Hourly Wage, 2005

Under $7.25 an Hour
Total
Total
Health Insurance
Hourly
Under
$5.15
$5.16 to
$7.25 and
Coverage
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
Insured
58,465
6,617
1,015
5,603
51,848
Uninsured
15,334
3,593
703
2,890
11,741
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Insured
79.2%
64.8%
59.1%
66.0%
81.5%
Uninsured
20.8%
35.2%
40.9%
34.0%
18.5%
Percent by Health Insurance Coverage
Total
100.0%
13.8%
2.3%
11.5%
86.2%
Insured
100.0%
11.3%
1.7%
9.6%
88.7%
Uninsured
100.0%
23.4%
4.6%
18.9%
76.6%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Sources of Family Income
Income can come from sources other than work. It may come from one’s
savings and investments in the form of interest and dividends. Other assets can
provide rental income to their owners. The government also provides income
support for many individuals and families. Still other forms of income are related to
past or current work such as private or public pension payments, unemployment
compensation, and workers’ compensation.
As shown in the middle panel of Table 13, the share of low-wage hourly
workers who received welfare was about twice that of workers paid at least $7.25 an
hour (1.7% versus 0.8%). Workers were classified as having receiving welfare if
they received public assistance payments such as Temporary Assistance for Needy
Families (TANF) or general assistance.

---

CRS-17
One-fourth of hourly workers who lived in families that received welfare earned
under $7.25 an hour. Although these workers might benefit from a $2.10 an hour
increase in the federal minimum wage, some might have their families’ welfare
benefits reduced or eliminated as a result of the pay raise. (See the bottom panel of
Table 13.)
Table 13. Distribution of Hourly Workers
by Family Receipt of Welfare, 2005
Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Income
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
Received Welfare
707
175
15
159
532
Did Not Receive
Welfare
73,092
10,036
1,702
8,334
63,057
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Received Welfare
1.0%
1.7%
0.9%
1.9%
0.8%
Did Not Receive
Welfare
99.0%
98.3%
99.1%
98.1%
99.2%
Percent by Family Receipt of Welfare
Total
100.0%
13.8%
2.3%
11.5%
86.2%
Received Welfare
100.0%
24.7%
2.2%
22.5%
75.3%
Did Not Receive
Welfare
100.0%
13.7%
2.3%
11.4%
86.3%
Source: Calculated by CRS from the CPS.
Notes: Details may not add to totals because of rounding. “Received welfare” means receipt of
Temporary Assistance for Needy Families (TANF) or general assistance.
In contrast, the wage rate that a worker earned per hour made little difference
in their families’ relative receipt of unemployment compensation and workers’
compensation. Specifically, 6.1% of hourly workers paid under $7.25 an hour lived
in families that received unemployment compensation in 2005, compared to 6.2% of
higher-paid workers. (See the middle panel of Table 14.) Similarly, 1.5% of hourly
workers who earned below $7.25 an hour and 1.5% of those who earned at least
$7.25 an hour lived in families that received workers’ compensation in 2005. (See
the middle panel of Table 15.)

---

CRS-18
Table 14. Distribution of Hourly Workers
by Family Receipt of Unemployment Compensation (UC), 2005
Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Income
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
Received UC
4,586
625
55
571
3,961
Did Not Receive UC
69,213
9,585
1,662
7,922
59,628
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Received UC
6.2%
6.1%
3.2%
6.7%
6.2%
Did Not Receive UC
93.8%
93.9%
96.8%
93.3%
93.8%
Percent by Family Receipt of UC
Total
100.0%
13.8%
2.3%
11.5%
86.2%
Received UC
100.0%
13.6%
1.2%
12.4%
86.4%
Did Not Receive UC
100.0%
13.8%
2.4%
11.4%
86.2%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.
Table 15. Distribution of Hourly Workers
by Family Receipt of Workers’ Compensation, 2005
Under $7.25 an Hour
Total
Total
Hourly
Under
$5.15
$5.16 to
$7.25 and
Income
Workers
$7.25
or less
$7.24
above
Number (1,000s)
Total
73,799
10,210
1,717
8,493
63,589
Received Workers’
Compensation
1,111
151
61
90
960
Did Not Receive
Workers’ Compensation
72,688
10,059
1,656
8,403
62,629
Percent by Hourly Wage
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Received Workers’
Compensation
1.5%
1.5%
3.6%
1.1%
1.5%
Did Not Receive
Workers’ Compensation
98.5%
98.5%
96.4%
98.9%
98.5%
Percent by Receipt of Workers’ Compensation
Total
100.0%
13.8%
2.3%
11.5%
86.2%
Received Workers’
Compensation
100.0%
13.6%
5.5%
8.1%
86.4%
Did Not Receive
Workers’ Compensation 100.0%
13.8%
2.3%
11.6%
86.2%
Source: Calculated by CRS from the CPS.
Note: Details may not add to totals because of rounding.

---

CRS-19
Appendix: Data and Methodology
Current Population Survey
CRS derived the data in this report from the Current Population Survey (CPS),
a Census Bureau survey of households. The monthly CPS is the main source of labor
force data for the nation. The CPS sample is representative of the civilian
noninstitutional population ages 16 and older. It does not include persons on active
duty in the Armed Forces or persons in institutions such as nursing homes or
correctional facilities. In March 2006, about 54,000 households were interviewed for
the basic CPS.17
Each month, one-fourth of the CPS sample is asked questions about current
earnings. Hourly wages are wages paid by the employer and do not include tips or
fringe benefits.18 Hourly wages are wages before taxes and other deductions. The
data in Tables 1 through 8 are averages for the twelve months of calendar year 2005.
Thus, the number of hourly workers shown in Tables 1 to 8 (i.e., 75.6 million) is a
monthly average for 2005.
Each March, the CPS asks questions about individual and family earnings and
income for the previous year. In March 2006, the survey collected information on
individual and family earnings and income for 2005. Tables 9 through 15 provide
family information for 2005 for hourly workers in the March 2006 basic survey. In
March 2006, there were an estimated 73.8 million hourly workers.
Limitations
The CPS has certain limitations for analyzing the impact of an increase in the
federal minimum wage. First, the FLSA includes a number of exceptions and
exemptions from the minimum wage. The CPS does not ask respondents if they are
covered by the minimum wage. Thus, some people who are paid less than $7.25 an
hour may not receive an increase in their hourly wage if the federal minimum wage
is raised. Second, the FLSA allows for lower minimum wage rates for tipped
employees, certain new hires under the age of 20, full-time students who work part-
time, handicapped persons, and others. A higher basic minimum wage may not affect
these workers.19
17 U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic
(ASEC) Supplement, available at [http://www.census.gov/apsd/techdoc/cps/cpsmar06.pdf],
p. G-2.
18 U.S. Census Bureau, Basic Monthly Survey Interviewer’s Manual, available at
[http://www.bls.census.gov/cps/intmantc.htm], chap. 5, section B.2.
19 Estimates based on a sample of households are also subject to nonsampling and sampling
error. Examples of nonsampling error include information that is misreported (e.g., some
respondents may round off their earnings) and errors made in processing collected
information. Sampling error occurs because a sample, and not the entire population, of
households is surveyed.

---

CRS-20
A limitation of the methodology in this report pertains to annual earnings and
family income in 2005 of hourly workers in March 2006. In March 2006, hourly
workers may have been earning either more or less than they earned in 2005. Some
workers may not have had any earnings in 2005 (e.g., they may have been new to the
labor force in March 2006). As a result, the wages of hourly workers in March 2006
may not be the same as their hourly wage in 2005. Similarly, some workers who had
earnings in 2005 may not have been employed or they were salaried, and not hourly,
workers in March 2006; therefore, they are not included in the analysis of annual
earnings or family income for 2005.
Another limitation of the methodology is that, in the CPS, a primary family may
include what the CPS calls a “related subfamily.” For example, an unmarried mother
with a dependent child may be living with her parents or a married couple may be
living with relatives. In the CPS, the income of persons in a related subfamily is
included in the total income of the primary family. This could have a tendency to
understate the number of low-wage workers living in low-income families (i.e.,
because the incomes of related subfamilies are included in the incomes of primary
families). On the other hand, unmarried couples (not living with relatives) are treated
either as separate individuals or, if they have children, as a primary family and an
unrelated individual. This could have a tendency to overstate the number of low-
income households (i.e., because the incomes of unmarried couples are treated
separately rather than together).

---