Forget the minimum wage. Check out the median (Part II)
Yesterday I made an argument for ignoring the debate around the minimum wage. I said the number we should really care about is the median wage of workers paid by the hour. That figure, for the 75.9 million Americans paid hourly rates, is $11.95. (The mean is higher—$14.25—but the Bureau of Labor Statistics thinks the median is a better measure since the distribution of wages is skewed.)
That post got a number of comments. Let me try to tackle some of them here. First, in response to Ffred, here's the distribution for 2007:
under $3.00.....................606,000
$3.00-$3.49.....................211,000
$3.50-$3.99.....................109,000
$4.00-$4.49.....................102,000
$4.50-$4.99.......................49,000
$5.00-$5.49.....................564,000
$5.50-$5.99.....................498,000
$6.00-$6.99..................3,045,000
$7.00-$7.99..................6,400,000
$8.00-$8.99...................7,157,000
$9.00-$9.99..................5,803,000
$10.00-$11.99..............12,296,000
$12.00-$14.99..............12,717,000
$15.00-$19.99.............12,525,000
$20.00 or more...........13,789,000
A very nice economist at the BLS tracked that down for me. I'm not sure why the groups of wages get broader as you go along. But that's the data as detailed as I've got it.
In response to MBirchmeier: Of the 75.9 million hourly-waged Americans, 57.7 million, or 76%, are working full-time. In that group, 55% are men and 45% are women. Among part-time workers, 32% are men and 68% are women.
And for rrsafety, here is the breakdown by age. (Unfortunately, it appears the BLS doesn't have data specifically cross-referencing the wage a person makes and how many kids he or she supports.)
16 to 19 years....................5,434,000
20 to 24 years...................10,841,000
25 to 29 years....................9,238,000
30 to 34 years....................7,674,000
35 to 39 years....................7,800,000
40 to 44 years....................8,226,000
45 to 49 years....................8,366,000
50 to 54 years....................7,186,000
55 to 59 years....................5,416,000
60 to 64 years....................3,197,000
65 to 69 years....................1,378,000
70 years and over..............1,118,000
Barbara!
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1
I see no practical way of utilizing the median wage in drafting laws to assist low-income (and low-skill) workers. It's not like Congress could pass a law mandating a median wage. That's why you still have to deal with the minimum wage when talking about legislation.
Malcolm!
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2
I'm certain the utilization of this data is not for application of laws directly related to it as the median wage itself, but as a means of teasing out context. IE: It's one thing to say the minimum wage is "X", it is another thing to say half of wage income earners in the United States make less than "X" per year. Knowing where (potentially) 50% of your population stands is much more useful in evaluating the state of the workforce than simply knowing the minimum allowed wage to be paid to an unknown percentage of the workforce.
Here's another collection of data that while limited, has an easy to utilize format for browsing from the University of Maryland.
http://www.bsos.umd.edu/socy/vanneman/socy441/trends/ratio15.html
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3
Thank you for digging up these additional numbers, to be honest none of them really matched what I expected breakdowns to be except for the age breakdown.
I must confess I find ffred's request much more interesting than mine. It appears that there is three local maximums, around $5, $8, and $11/hour. I wonder if these are the most common wages for service(tip based), unskilled, and skilled (or management) jobs accordingly. If I had to hazard a guess to why the distributions are uneven it could be an attempt to emulate a logarithmic scale. A $1 difference at $3/hr being a larger difference than a $1 raise at $15+/hr.
-MBirchmeier
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4
Well done Barbara!
Maurice2u is correct, this info is helpful regarding context.
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5
@Malcolm!: Maurice2u expressed my intentions better than I could have. In public debate, the minimum wage often gets used as a proxy for what hourly workers and/or poor people make in this country. I was simply saying that's bad logic. Barbara!
@rrsafety: Thanks. And well done on your part for asking good questions. I have an amazingly talented editor, but sometimes I learn much more by having you guys go over what I write.
@MBirchmeier: That's a fascinating theory about the three local maximums. The BLS breaks down wages by occupation here: http://www.bls.gov/oes/current/oes_nat.htm . The numbers don't neatly map onto our conversation, though, because the data covers everyone, not just workers paid by the hour.
Although now I have something else that's got my eyebrows raised. The nation's 299,160 "chief executives" make a mean annual salary of $151,370. I guess all those folks running small businesses bring the figure down from the $10 million+ range. I'm sure that would make for another interesting distribution...
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6
As has been pointed out, my knowledge of statistics is pretty spotty. Having said that, why does the distribution look to me like half of a curve (everyone $20 and over, stand over here)? Is the other half outside the objective of the analysis, or just being avoided?
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7
@Barbara: Looking at the BLS statistics it breaks things down a lot more granular, perhaps I'll look at this in more detail and see if I see any interesting trends.
As per your CEO note, I wonder how the BLS differentiates 'Wage' from 'other compensation'. Looking at Yahoo's CEO Terry Semel, he had a salary of ~250k in 2006, but was compensated to the tune of about 70M. This would play games with the mean at least.
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8
@MBirchmeier: Here, let me make things even more complicated. My BLS economist directs us to this PDF for median weekly earnings by occupation: http://www.bls.gov/cps/cpsaat39.pdf . He points out that this is a household (i.e., worker) survey, like the data we were originally using to look at national median wage. The more recent link I sent, "May 2007 National Occupational Employment and Wage Estimates," is a survey of establishments (i.e., companies). The numbers don't exactly overlay perfectly.
@Ffred: You mean why don't they continue on with $20.00-$24.99, $25.00-$29.99, etc? I have no idea. My BLS guy put in a call to one of his colleagues today about why the data is grouped as it is. (He wasn't the one who made that decision.) If we get some answers, you'll be the first to know. As for your understanding of statistics: My take is that it's more important to be able to ask a question than to always know the answer right off the bat.
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