Minimum wage is a statutory requirement to pay all employees a certain base salary (with some exceptions). It's a policy that originated in New Zealand and Australia but now exists in roughly 90% of the world's economies. Like any corrective policy, there has always been debate about its effectiveness. Proponents argue that having a minimum wage guarantees employees a certain standard of living and increases morale, while others believe that it actually creates poverty and puts unqualified individuals into jobs.
But recent debate has focused less on the concept of minimum wage and more on its on-ground-presence: What does minimum wage actually pay for, and who is relying on it for their day-to-day income?
As Pew Research Center data indicates, not as many people as you might think. Just 4.7% of the nation's hourly-paid workers, or those that do not earn a fixed salary, make at or below the federal minimum wage. These workers are largely young, white, and part-time, working in industries like leisure, hospitality, and retail. These workers are also geographically concentrated in the South.
In recent years, many groups working to combat income inequality and poverty have moved away from the concept of minimum wage in favor of advocating for a "living wage," defined as an income sufficient to provide for a worker or his or her family's basic needs given the cost of living in their community. Supporters argue that "minimum wage" as a federally defined price floor is useless if its purchasing power is not sufficient in a given area — having a job that pays minimum wage instead of a living wage might therefore force an individual to live in particular communities with higher crime rates, or subpar schools. Washington, D.C., is currently considering passing legislation that would raise the city's minimum wage to $12.50, much closer to a living wage, but a cost of business that is already threatening to drive big retailers like Walmart — and therefore, new jobs — away from the city.
Further unpacking would help this data really paints a story about whether the federal minimum wage serves the population currently receiving it. Are these individuals clustered in urban areas where the cost of living is higher? Are the young workers that make up over half of the minimum wage population the sole earners in their households, or are they supplementing a parent's income? The purchasing power of the minimum wage income has been on the rise, but has not yet reached its late 1960s peak, and represents just one piece of a national conversation on income inequality.
The outcome of the Washington, D.C., legislative battle, and subsequent public outcry one way or another, will likely be an indicator of whether we as a nation feel that minimum wage is really enough for people to live on in the United States today.