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Nearly one-third of American workers make less than $15 an hour, study finds

By Tami Luhby, CNN

Nearly 52 million workers — or almost one-third of the nation’s labor force — earn less than $15 an hour, according to a study released Tuesday by Oxfam America, an anti-poverty advocacy group.

These workers, whose annual income is less than $31,200, are disproportionately women and people of color, the study found.

Some 47% of Black workers and 46% of Hispanic workers make less than $15 an hour, compared with 26% of White workers. Some 40% of female workers earn less than that threshold, compared with 25% of male workers.

Half of the women of color in the workforce make less than $15 an hour, as do nearly 58% of single parents.

“It’s shameful that at a time when many US companies are boasting record profits, some of the hardest working people in this country — especially people who keep our economy and society functioning — are struggling to get by and falling behind,” said Kaitlyn Henderson, the study’s author and senior research adviser at Oxfam America.

The report is one of the latest efforts to push for raising the federal minimum wage above the current $7.25 an hour, where it has been since 2009. Many worker advocates would like to see the threshold increased to $15 an hour, which they say is a first step to creating a more livable wage.

Soaring inflation, which has pushed up the prices of food, housing, gasoline and other necessities, has made it even more difficult for lower-income families to survive on their wages, Oxfam America said.

Take Vikki Tully, 65, who lives in Alkol, West Virginia. She makes $12.70 an hour after working as a Head Start teacher for 26 years.

The skyrocketing cost of gas means she and her husband will take fewer trips this summer to visit their grandchildren in Virginia Beach, while the increased cost of wood and building materials means they will have to put off repairs and updates to their home.

Lower pay also makes it harder for her Head Start program to fill its vacancies. A teacher’s aide, for instance, starts at $10.10 an hour, while bus drivers and cooks start at $9.87 an hour, she said.

“We’re short-staffed at one of the centers because no one wants to work because of the pay,” Tully said. “They have tried and tried to hire people. We’re losing people to other jobs too.”

A growing number of companies have been raising their pay to lure and retain workers — a trend that started even before the pandemic. Last year, Under Armour raised its minimum wage to $15 an hour, while Amazon, Costco, Walmart, McDonald’s, Starbucks and others said they would increase the pay of some or all of their employees. Target announced last month that it would raise its starting wage for some positions to $24 an hour.

Biden administration efforts

The Biden administration hiked the minimum wage for federal civilian workers stationed in the US and for federal contractors to $15 an hour earlier this year. Several Republican attorneys general have challenged President Joe Biden’s authority to lift the threshold for federal contractors.

The President also sought to raise the federal minimum wage to $15 an hour as part of the American Rescue Plan Act, which he signed into law in March 2021. However, the Senate parliamentarian ruled against including it in the Covid-19 relief bill, saying it did not meet a strict set of guidelines needed to move forward in the Senate’s reconciliation process.

Democratic lawmakers have repeatedly introduced the Raise the Wage Act bill, which would boost the federal minimum wage to $15 an hour and phase out the sub-minimum wage for tipped workers, youth employees and workers with disabilities. But it has never made it through the Senate.

There are various analyses of how many people earn less than $15 an hour. The left-leaning Economic Policy Institute last year that 22 million people would see a boost in pay if the federal minimum wage was raised to $15 an hour in 2025 under the Raise the Wage Act.

Oxfam America’s figure is higher because it includes the number of people who currently make less than $15 an hour and looks at a broader set of workers that includes tipped wage workers, sub-minimum wage workers, gig workers, farmworkers and care workers, Henderson said. It also includes Puerto Rico, which adds nearly 1 million people.

Both analyses are based on US Census Bureau data.

Where lower-paid workers live

Oxfam America, which backs the Raise the Wage Act legislation, also looked at which states have larger shares of their labor forces making $15 an hour.

The South has a disproportionate percentage of workers making less than that threshold, as do some states in the Midwest and Rocky Mountain region, the study found.

In Texas, for instance, more than 60% of women of color earn less than $15 an hour. In Mississippi, 45% of the state’s workforce makes less than that amount.

At the other end of the spectrum, Washington, DC, has a minimum wage of $15.20 an hour, while California’s minimum wage this year rose to $15 an hour for larger companies. Some localities, including Seattle, Denver and Los Angeles, have even higher minimum wages.

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