All is Not Well For Low Wage Workers Published in The Wall Street Journal

Written by Martha Ross Brookings Institution Washington on 01/23/2020

Your editorial “The Economy’s Inequality Dividend” (Jan. 11) suggests that things are getting better for low-wage workers. You gloss over the real economic hardship by focusing only on growth rates without also considering actual wage levels.

My own research at the Brookings Institution found that 53 million Americans—44% of workers ages 18-64—earn low wages, with median earnings of $10.22 an hour. They are not all young people, or students, or secondary earners. Two-thirds are in their prime working years of 25-54, and about half are primary earners or contribute substantially to family finances.

These realities are stark when we investigate beyond aggregate labor populations and look directly at low-wage occupations. Even with an annual growth rate of 3.6%, the wages of nonsupervisory hospitality workers (of whom there are 15 million) are still low: $14.73 an hour in December 2019 compared with $14.17 in December 2018. The 4% growth rate for nonsupervisory retail workers (of whom there are 13.5 million) meant that wages increased to $16.81 from $16.28.

Multiple indexes show that earnings from low-wage jobs are frequently outpaced by the basic costs of living, even in the lower-cost areas like South Bend, Ind., cited in the article. It’s very difficult to support a family with a low-wage job. Based on the MIT Living Wage calculator, adults without children in St. Joseph County, Indiana (home to South Bend), might be able to get by on the retail and hospitality jobs mentioned above, but families with children need wages considerably higher (for example, an adult with a child needs $23.15 an hour).

Despite a recent uptick in wages and a low unemployment rate, tens of millions of Americans earn barely enough to live on.

Martha Ross

Brookings Institution