Why it’s getting harder for workers to move beyond minimum wage

Moving beyond minimum wage

A number of components factor in when trying to figure out why it has become more and more difficult for workers to move beyond earning the minimum wage. While most people consider a minimum-wage job a stepping stone toward a quick promotion and pay raise, recent years have seen people struggling along in the same position for years at a time, no pay raise in sight.

Factually speaking, 1/5 of minimum-wage workers in the mid-1990s were still earning minimum wage one year later. According to FiveThirtyEightEconomics‘ Ben Casselman, that number is now approximately 1/3. Many people earning a minimum wage who do actually receive any type of raise are simply bumped up to the next state-mandated minimum wage, say from $6.50 to $6.74.

The economy remains a tremendous factor

A huge factor for the lack of raises is certainly the 2008-2009 economic recession and its seemingly snail’s pace recovery. Because recovery has been slow, those who do receive the raises they deserve almost receive a slap in the face. Per the research done by Casselman, 2/3 of minimum-wage workers in 2013 were still earning within 10 percent of their minimum wage one year later. In 2008, 2/5 of American minimum-wage workers were still near their minimum wage within five years of checking back in on them.

America’s decline in manufacturing is another point that factors into the lack of raises from minimum-wage jobs. Americans without higher education who used to turn directly to well-paying factory jobs, are now left with no other option but minimum-wage work that is not unionized. Another problem is the deterioration of private-sector unions, which used to negotiate higher pay and raises for the unions.

Minimum wage used to be for entry level teenagers

In the past, minimum-wage jobs were for entry level positions worked by teenagers. According to Casselman, “More than a quarter of minimum-wage earners under 25 are still making minimum wage a year later, compared with about a sixth in the mid-1990s.”

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Worse still, it’s even harder for older minimum-wage workers. More than 30 percent of minimum-wage workers 25 or older are still earning minimum wage after a year. Nearly 70 percent of minimum wage workers in 2008 were earning within 10 percent of their minimum wage three years later.

“That suggests that workers who are forced to take low-wage jobs later in life have a particularly hard time escaping them,” according to Casselman.

The good news for minimum wage workers

Fortunately for America’s minimum-wage worker, there is a movement throughout the country to increase the minimum wage and make it more livable. In November of 2014 five states voted for substantial wage increases, and several cities followed in their tracks.

In addition, many fast-food workers nationwide are joining together in the union-backed “Fight for $15” movement, to increase their minimum pay to $15 an hour.

#MinimumWage

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