A smaller share of Texas workers earned the minimum wage or less last year, but the figure still is higher than the national average.
About 400,000 people in Texas, or 6.4 percent of all hourly workers, earned the federal minimum wage or less in 2013, according to data released today by the U.S. Bureau of Labor Statistics’ Southwest Information Office. That’s down from 7.5 percent in 2012.
Texas does not have a state minimum wage and follows the federal minimum wage of $7.25 an hour. The average hourly wage for all workers statewide was $11.99 in 2013, compared with $12.93 nationwide.
The state’s is still high compared with the national rate of 4.3 percent of hourly workers earning the minimum wage or less in 2013. Texas ranked No. 5 nationally for the share of workers earning at or below the federal minimum wage.
The lowest share of Texans making minimum wage or less was 3 percent (173,000 people) in 2006, according to the BLS Southwest regional commissioner Stanley Suchman. (See chart above.) When the federal minimum wage began to rise in 2007 after being flat for nearly a decade, more Texas workers fell into that category, peaking at 550,000 people in 2010 before declining over the last three years, he explained.
Men vs. women
Far more women earn the minimum wage or less than men in Texas. Women made up about 63 percent (250,000 women) of those workers last year, compared with 150,000 men. Another way of looking at it is that 8.4 percent of all hourly paid women earned at or below the federal minimum wage compared with 4.6 percent of hourly paid men across the state.
The average hourly wage for women was $11.11 last year, compared with $12.82 for men. Nationally, the average hourly wage for women was $12.12, compared with $14 for men.
Tennessee (7.4 percent) had the highest share of workers at or below the federal minimum wage in 2013, followed by Idaho (7.1 percent) and Alabama and Arkansas (6.8 percent each).
Oregon, California and Washington were among the states with the lowest share — each with less than 2 percent of their workers earning at or below the minimum wage.
Twenty-one states and Washington, D.C., had minimum wages higher than the federal minimum as of Jan. 1. The U.S. Department of Labor tracks minimum wages by state.
Update at 9 a.m., April 11: Minnesota legislators yesterday approved an increase to the state minimum wage to $9.50 by 2016 and tied the wage to inflation starting in 2018. Gov. Mark Dayton is expected to sign the bill into law on Monday. Some smaller employers can pay a lower rate, and the federal minimum wage still will exist for under-18 workers at bigger businesses and as a temporary training wage for workers who are age 19 and 20.
Increasing the minimum wage
Recent congressional proposals would raise the federal minimum wage to $10.10 an hour. The last increase was in 2009, when the hourly wage rose to $7.25 from $5.15 in 2007. It was $5.85 in 2008 and $3.80 in 1990.
Advocates say a higher minimum wage would put more money in consumers’ pockets, helping businesses and the economy. Critics claim it would burden employers and hurt hiring.
An increase in the federal minimum wage to just $9 an hour would make workers worse off due to cuts in benefits, costing them 35 cents an hour, according to a new study by the Dallas-based National Center for Policy Analysis.
Employers will compensate for the increased cost of wages by cutting other benefits, such as vacation time, training and workplace ambiance, says NCPA senior fellow Richard McKenzie says in the report. He noted that when the minimum wage increased in 1967, one economist found that workers gained 32 cents in hourly pay, but lost 41 cents an hour in training.
The NCPA report also noted that when New York increased its minimum wage, North Carolina State University economist Walter Wessels found that retailers increased work demands and cut hours. Wessels also said that for every 10 percent increase in the minimum wage, workers lose 2 percent of non-cash compensation an hour. (That’s where McKenzie’s loss of 35 cents comes from.)
A study done last year by the Center for Economic and Policy Research found that the minimum wage has little or no “discernible effect” on employment because the “cost shock” is small relative to most companies’ overall costs and total payments to low-wage workers.