Who Is the Low-Wage Workforce?

About 30 million—that’s how many prime-age, low-wage workers the United States has. In total, low-wage workers make up more than a quarter of the total labor force. These jobs are often the most essential yet experience the least security.

To illustrate who makes up the low-wage workforce in the US, we’ve set the low-wage threshold as equal to two-thirds of the median wage of workers in their prime working years (ages 25–54). That equals $16.98 an hour. A person working full-time at that threshold makes about $35,000 a year. In America’s three largest cities, the average yearly rent for a one-bedroom apartment comprises at least half of that amount. When factoring in utilities, groceries, and any other necessities, earning at or below the low-wage threshold can start to look untenable.

Low-wage workers also receive fewer benefits compared with their higher-earning peers. Only 24 percent of low-wage workers have a pension plan through their work, compared with 47 percent of higher earners. A similar gap exists for health insurance: 57 percent of low-wage workers have a work-sponsored health insurance plan compared with 88 percent of higher earners.

Pay inequality between men and women has persisted for decades in the US, with the overrepresentation of women in low-wage jobs partially to blame. Women make up more than half of the low-wage workforce, whereas men make up the majority of higher earners. As a result, the median hourly wage for women is more than $4 lower than for men, with women in the US earning just 82 cents for every $1 earned by men.

These gaps widen even further when disaggregating by race and ethnicity. Black women earn just 62 cents compared with white men, and Latina women earn 54 cents. In part, women are funneled more toward low-wage work and are blocked on the career ladder because of discrimination in hiring and compensation as well as expectations of centuries-old worker norms, such as not having caregiving responsibilities.

The racial wage gap has been well-documented, and while a number of factors influence its perpetuation, the segregation of Black and Latinx workers into lower-earning industries plays an outsized role. Over a lifetime, the average white man will earn $2.7 million dollars, while a Black man earns $1.8 million, a Black woman $1.3 million, a Latino man $2.0 million, and a Latina woman $1.1 million. In fact, research has shown that every $1 in income translates to $5.19 in wealth for white people, but just 69 cents for Black people.

Although white workers still make up the majority of the low-wage workforce because they are the largest group in the labor force overall, Black, Latinx, and Indigenous workers are significantly overrepresented. Black workers make up 17 percent of low-wage workers and Latinx workers make up 27 percent, despite 14 and 18 percent respectively in the overall workforce. As a result, the median wage for both groups sits at roughly $22, about $6 less than white workers.

Although many people think that low-wage work is traditionally a field of students and early-career workers, low-wage workers are almost as likely to be older as they are younger. In fact, for workers making the federal minimum wage, 88 percent are 20 or older, with the average age of 35 years.

For workers in their prime working years, those earning low wages do skew younger than the workforce on the whole, but only slightly. People between the ages of 25 and 34 comprise 35 percent of the overall workforce, compared with 39 percent of the low-wage workforce.

Many of these low-wage workers also have to support families, with 43 percent of workers between ages 25 and 50 years raising children. These families may face barriers to finding higher paying jobs, as child care may take a significant portion of their income and familial responsibilities may stifle pursuing further education.

With each additional educational achievement, workers projected lifetime earnings increase. Although subsequent degrees do have diminishing returns, a person with a bachelor’s degree earns 84 percent more over a lifetime than someone with just a high school diploma. For the low-wage workforce, college degrees are less common, with just 23 percent holding a college or more advanced degree.

The majority of low-wage workers (77 percent) have a high school diploma or less, which can automatically rule them out of consideration for some jobs. Racial, ethnic, and gender disparities play a role at every level of educational attainment as well. Nearly 40 percent of white workers with a high school diploma or less make more than the low-wage threshold, compared with 22 percent of Black and 25 percent of Latinx workers. White workers with a high school diploma even out earn Black and Latinx workers with a higher level of education. And women are more likely to work low-wage jobs at every education level (PDF), with the gender pay gap actually expanding at higher levels of education despite women earning more.

Although many policymakers may like to think of low-wage jobs as a way for students to earn some spending money or as springboards to better paying occupations, the reality is these jobs are the primary earning mechanism for most low-wage workers and meant to support themselves and their family. For policymakers, understanding what kinds of jobs offer low wages can offer a first step for improving the security and compensation in these roles.

The industries that account for the highest share of low-wage workers are agriculture and food services, comprising 17 percent of the low-wage workforce. Other service and manual labor jobs also employ a large share of low-wage workers, including retail, health care, and waste management. Increasing wages in these industries would benefit workers the most, as would offering more stable schedules, job training and development, and health and retirement benefits.