Minimum Wage Only Leads to More Minimum Wage

One of the financial stories we tell ourselves is that, if we have to, we can start at the bottom and work our way up. We can take that minimum wage job and start building from there.

But what if that job doesn’t give you anything to build on? As FiveThirtyEight reports, people earning minimum wage are likely to continue earning the minimum wage for years to come:

In 2006, [Anthony Kemp] took a job as a cook at a Kentucky Fried Chicken in Oak Park, Illinois. The job paid the state minimum wage, $6.50 an hour at the time, but Kemp figured he could work his way up.

“Normally, a good cook would make $14, $15, $17 an hour,” Kemp said. “I thought that of course I’d make a better wage.”

He never did; nine years later, the only raises Kemp, 44, has seen have been the ones required by state law. He earns $8.25, the state’s current minimum wage.

FiveThirtyEight’s Ben Casselman calculated the big-picture numbers on minimum wage earners:

During the strong labor market of the mid-1990s, only 1 in 5 minimum-wage workers was still earning minimum wage a year later. Today, that number is nearly 1 in 3, according to my analysis of government survey data. There has been a similar rise in the number of people staying in minimum-wage jobs for three years or longer.


Even those who do get a raise often don’t get much of one: Two-thirds of minimum-wage workers in 2013 were still earning within 10 percent of the minimum wage a year later, up from about half in the 1990s. And two-fifths of Americans earning the minimum wage in 2008 were still in near-minimum-wage jobs five years later, despite the economy steadily improving during much of that time.

One of my persistent anxieties is that, should something happen to my current career, I’ll be beleaguered with advice to “go get a job, ANY job!” First, I want to say, it doesn’t work that way — and second, it might be better from a long-term financial standpoint to stay away from a lot of minimum-wage jobs.

This is also me coming from a “privilege is being able to play the long game” perspective. So I’m going to open up a few questions for all of you:

1) Do you tell yourself the financial story that, if you had to, you could work your way up from minimum wage?

2) If something happened to your current job, would you jump into “get a job, ANY job,” or would you spend down your savings and potentially go into debt hustling/waiting for an opportunity?

3) If you are currently earning minimum wage, do you see yourself earning more in the future?

Photo credit: Alamo’s Basement

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