Senior Fellow - Brookings Metro
Former Senior Research Analyst - Brookings Metro
Jobs play a central role in the lives of most adults. As forces like globalization and automation reshape the labor market, it is clear that some people and places are positioned to do well while others risk becoming collateral damage. The well-educated and technically savvy find ample employment opportunities, while those with lower levels of education face a labor market that is decidedly less welcoming, with lower wages and less potential for career growth. Meanwhile, some regions dramatically outpace others in job growth, incomes, and productivity, raising disquieting questions about how best to promote broad-based economic growth.
Against this backdrop, we provide in a new report extensive demographic and occupational data on low-wage workers nationally and in more than 350 metropolitan areas. It is a large and diverse group of people, and they play a major role in our economy.
Low-wage workers comprise a substantial share of the workforce. More than 53 million people, or 44% of all workers ages 18 to 64 in the United States, earn low hourly wages. More than half (56%) are in their prime working years of 25-50, and this age group is also the most likely to be raising children (43%). They are concentrated in a relatively small number of occupations, and many face economic hardship and difficult roads to higher-paying jobs. Slightly more than half are the sole earners in their families or make major contributions to family income. Nearly one-third live below 150% of the federal poverty line (about $36,000 for a family of four), and almost half have a high school diploma or less.
Women and Black workers, two groups for whom there is ample evidence of labor market discrimination, are overrepresented among low-wage workers. Read more about the demographic characteristics of low-wage workers beginning on page 9 of the report.
We segment low-wage workers into nine distinct clusters based on age, educational attainment, and school enrollment—factors we judged as providing the simplest yet most comprehensive framework to assess employment prospects. Age is a fundamental organizing principle for both individuals and society: it shapes people’s activities and roles as well as institutions and policies. Education is a primary sorter of job opportunities, and for young adults, school enrollment is also an important differentiator. Students have different work patterns than non-students, and enrollment in college or training signals future job possibilities. Read more about the clusters beginning on page 13 of the report.
The clusters can provide state, local, and regional officials a useful starting point to understand their low-wage workforce and inform education, training, and economic development strategies. We also developed fictionalized personas to further illustrate the varying circumstances of low-wage workers, using the data to create composite portraits.
The largest cluster, accounting for 15 million people or 28% of low-wage workers, consists of workers ages 25 to 50 with no more than a high school diploma.
Clusters of the low-wage population
Source: Brookings analysis of 2012-2016 American Community Survey 5-year Public Use Microdata Samples
- Cluster 1: Ages 18-24, not in school, no college degree
- 7.1 million people; 13% of low-wage workers (see full profile)
- Cluster 2: Ages 18-24, in school, no college degree
- 3.8 million people; 7% of low-wage workers (see full profile)
- Cluster 3: Ages 18-24, with an associate degree or more
- 2 million people; 4% of low-wage workers. (see full profile)
- Cluster 4: Ages 25-50, with a high school diploma or less
- 14.8 million people; 28% of low-wage workers (see full profile)
- Cluster 5: Ages 25-50, with some post-secondary education but no degree
- 7.7 million people; 14% of low-wage workers (see full profile)
- Cluster 6: Ages 25-50, with an associate degree or more
- 7.6 million people; 14% of low-wage workers (see full profile)
- Cluster 7: Ages 51-64, with a high school diploma or less
- 5.6 million people; 10% of low-wage workers (see full profile)
- Cluster 8: Ages 51-64, with some post-secondary education but no degree
- 2.3 million people; 4% of low-wage workers (see full profile)
- Cluster 9: Ages 51-64, with an associate degree or more
- 2.4 million people; 5% of low-wage workers (see full profile)
For additional information on how we define low-wage workers and create the clusters, see page 5 of the report.
Variation by metro area
The relative size of the low-wage workforce varies considerably by region. Across more than 350 metro areas, the share of workers earning low wages ranges from 30% to 62% of the overall workforce. Low-wage workers are particularly concentrated in smaller places in the southern and western parts of the United States. They make up larger shares of the workforce in places with lower employment rates and that concentrate in agriculture, real estate, and hospitality.
Read more about how low-wage workers are distributed across metro areas, and how that relates to industrial composition and demographics beginning on page 33 of the report.
Policies and programs to support low-wage workers advance to higher wages and greater financial stability should address both sides of the labor market: the assets and circumstances of workers and the number and nature of available jobs.
- Improve worker skills. We need to develop close links with area employers to provide skills tailored to the local labor market and to provide learners with sufficient guidance, advising, and support. This is already happening in many places, but at nowhere near the scale required. We should diffuse and scale what works, which will require additional funds, political will to re-allocate funding toward evidence-backed programs, a commitment to organizational change on the part of education and training organizations, and greater employer involvement.
- Address discrimination and bias in the labor market. We need stronger enforcement of anti-discrimination laws regarding the hiring, promotion, and pay of people of color, women, and older adults through the federal Equal Employment Opportunity Commission. States and localities can also enact and enforce workplace protection laws addressing discrimination.
- Promote good jobs through economic and workforce development. The success of any job seeker depends not only upon her skills and abilities, but also on the strength of the economy and the number and types of available jobs. There are simply not enough jobs paying decent wages for people without college degrees to escape low-wage work. Education and training on its own is insufficient. We need to rethink our approaches to workforce and economic development, by better linking worker skills to firm and regional productivity and focusing more on helping businesses grow and innovate and less on business attraction and incentives.
Read more about our recommendations beginning on page 39 of the report.
Read the companion report titled Realism about reskilling by Marcela Escobari, Ian Seyal, and Michael J. Meaney.
Report Produced by Brookings Metro