People are talking about the minimum wage a lot. They always have. But with the government's plan to raise the federal minimum wage to $15 per hour, the talk is even more prevalent than usual.
But why now? Why is the government trying to keep us talking about it now? It's a voter issue, sure, so it gets people out to the polls. But election season is over, and yet the topic is sticking around. What's so fascinating about it this time?
Perhaps it's because there aren't many other party-based political topics to discuss. Perhaps it's because politicians themselves keep talking about it.
Only 1.5 percent of the workforce is paid the minimum wage.In fact, given all the talking points and media coverage the issue has received lately, it's not surprising that most people assume that approximately 30 percent of US workforce earns minimum wage. Presumably something that gets so much attention affects a lot of people, right?
It only affects 1.5 percent of the entire workforce.
Most of that percentage works in the food and service industry. Good workers earn tips on top of their base pay, which is an incentive to enter and stay in the industry. Adding tips to their pay usually means these workers make more than minimum wage. If we take them out of the number of workers earning minimum wage, the percentage falls to 0.5 percent of the total workforce.
What if we only look at hourly workers, excluding salary?
The percentage is still less than three percent.
Clearly the perception and reality of this politician-driven issue are not cohesive. Why would that be?
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Antony Davies
Dr. Antony Davies is the Milton Friedman Distinguished Fellow at FEE, associate professor of economics at Duquesne University, and co-host of the podcast, Words & Numbers.
James R. Harrigan
James R. Harrigan is Managing Director of the Center for Philosophy of Freedom at the University of Arizona, and the F.A. Hayek Distinguished Fellow at the Foundation for Economic Education. He is also co-host of the Words & Numbers podcast.