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One in Three U.S. Workers Are Earning Less Than $15 an Hour

Bloomberg 3/22/2022 Ella Ceron

A server wearing a protective mask and gloves carries drinks at a restaurant in Montclair, New Jersey, U.S., on Monday, June 15, 2020. New Jersey enters Phase 2 on Monday, opening up outdoor dining, in-person retail and child care services with restrictions in place to reduce the risk of Covid-19 spread.

© Bloomberg A server wearing a protective mask and gloves carries drinks at a restaurant in Montclair, New Jersey, U.S., on Monday, June 15, 2020. New Jersey enters Phase 2 on Monday, opening up outdoor dining, in-person retail and child care services with restrictions in place to reduce the risk of Covid-19 spread.

(Bloomberg) -- With an effort by Democrats to boost the national minimum wage stalled, a new report finds that on average one in three U.S. workers is still making less than $15 an hour, while the share of women and people of color earning that amount is even greater.

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Nearly 52 million U.S. workers — or 32% of the country’s workforce — earn less than $15 an hour, according to a report published Tuesday by Oxfam America. The data help quantify how many Americans could be impacted by the Raise the Wage Act, which would set a $15 federal hourly minimum and has been pending in Congress since January 2021.

Women and people of color are more likely than their White and male counterparts to be lower earners, the study finds. While 25% of men earn less than $15 an hour, the figure is 40% for women. Half of working women of color reported the same.

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“There's a history of why people were locked out,” Kaitlyn Henderson, one of the report’s authors, told Bloomberg’s QuickTake on Tuesday. “Overwhelmingly, it was discriminating against women and people of color, and we see the echoes of that even today.”

The national minimum wage was raised to $7.25 an hour in 2009, and by law an employer must pay the higher of the minimum salaries mandated by state or federal government. As a result, many minimum wage workers end up earning more than $7.25. But advocacy groups argue that even the proposed $15 an hour is too low. For example, an August 2021 report by USAFacts found that a worker earning that much would have to put in over 73 workweeks’ worth of shifts to break even with family expenses.

The Oxfam report also highlights geographical differences in wages. In Mississippi, 45% of the workforce earns less than $15 an hour, and in Puerto Rico it’s 76%. On the other end of the spectrum, just 14% of workers in Washington state earn less than $15 an hour.

The practice of a subminimum wage for tipped workers, which allows businesses to pay their workers $2.13 an hour on the good-faith effort that tips will make up the difference, is flagged as well. “The enforcement of that is very, very sketchy,” Henderson noted. Wage theft affects 17% of low-wage workers, according to an Economic Policy Institute report.

“The subminimum wage, again, is sort of a legacy of the racist and sexist creation of minimum wage policies in this country,” Henderson said, noting that the people who were first excluded from wage minimums were domestic workers, farm workers, and restaurant workers — and a disproportionate number of those workers were Black or female.

The Raise the Wage Act would eliminate the separate minimum wage requirements for tipped, newly hired and disabled employees. After a period, those employees would be paid the same minimum wage as regular employees.