Minimum Wage Hikes Have Reversed Wage Declines for Workers in Lowest-Paid Jobs

Worker activism for $15 wage floor—not Trump policies—are driving those wage gains;

Wage stagnation at the bottom persists in states that have not raised minimum wage

New York, NY—A new report from the National Employment Law Project makes clear that minimum wage hikes in states and cities—not Trump administration policies—are driving real wage gains for workers in the lowest-paid jobs. President Trump, in his State of the Union speech, tried to take credit for rising wages for underpaid workers.

“We’re finally seeing real wage growth for workers in the lowest-paid jobs, but it’s overwhelmingly concentrated in states that have raised the minimum wage. This underscores how it’s the Fight for $15’s wage increases—which the Trump administration is blocking at the national level—that are driving better paychecks,” said Irene Tung, senior researcher and policy analyst with NELP and the report’s author. “The bottom fifth of workers has now gained back the big losses in purchasing power they experienced immediately after the recession, and more. It’s an important reminder that if we are to reverse long-term wage stagnation in the U.S., workers coming together will play a critical role. Hopefully, this is only the beginning. Our country needs workers to continue to join together to push lawmakers and business to do better on wages and compensation.”

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Real wages (i.e., wages adjusted for inflation) for the lowest-paid occupations have increased measurably since the recovery began, aided by a wave of minimum wage increases in states and cities around the country, according to NELP, which has tracked wage trends since the end of the recession.

The report compares the 26 states (plus the District of Columbia) that raised their minimum wage rates between 2013 and 2018 to the 24 states that did not, and finds the following:

  • Nationally, occupations in the bottom fifth, which lost the most ground earlier in the recovery, saw median real wage increases of 3.6 percent between 2009 to 2018. Much of the gain occurred between 2014 and 2018, after the wave of new minimum wage policies, during which workers in the bottom fifth saw a 9.8 percent increase in real wages.
  • In those states that implemented minimum wage increases between 2013 and 2018, the bottom fifth gained close to four percent since 2009. By contrast, in the states without minimum wage increases between 2013 and 2018, the bottom fifth did not experience real wage growth, with real wages remaining stagnant (0.5 percent decline) since the end of the Recession.
  • All other groups (i.e., the remaining four-fifths) experienced wage stagnation, with very small overall increases or decreases in purchasing power during this period (less than 2 percent).

“These wage gains show the critical impact of the Fight for $15 movement in delivering raises for workers in the lowest-paying jobs, especially workers of color,” said Rebecca Dixon, NELP’s executive director. “However, raising the minimum wage alone is not enough. We cannot gloss over the fact that despite falling unemployment rates for Black workers, the wage gains during the recovery have come much slower for Black workers. Moving forward, we must emphasize targeted strategies that more directly address the roots of systemic racism in the labor market. We also must continue to build the power of all workers to come together and push for real solutions to the problems of wage stagnation and economic inequality that have plagued our nation’s workers for far too long already.”

READ THE REPORT:
Minimum Wage Increases Reverse Post-Recession Wage Declines for Workers in Lowest-Paid Jobs

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