U.S. Has Highest Share Working In Low-Wage Jobs, OECD Says

04/16/2012 09:03 am ET | Updated Apr 16, 2012
  • Bonnie Kavoussi Master's student in economics, the University of Michigan

It's not always great to be number one.

Out of all OECD countries, the U.S. had the highest share of employees toiling away at low-wage work in 2009, according to OECD data cited by Mark Thoma, an economist at the University of Oregon. The graph was originally published in a January paper by John Schmitt, senior economist at the Center for Economic and Policy Research.

One in four U.S. employees were low-wage workers in 2009, according to the OECD. That is 20 percent higher than in the number-two country, the United Kingdom. At 4 percent, Belgium has the smallest share of its in employees working in low-wage jobs. Low-wage work is defined as earning less than two-thirds of the country's median hourly wage.

The number of employees working in low-wage jobs has been rising since 1979, according to Schmitt. And low-wage workers are better educated than ever. The percentage of low-wage workers with at least some college education has spiked 71 percent since 1979 to 43.2 percent of all low-wage workers, according to a recent analysis by Schmitt.

Schmitt drew the following conclusions from the U.S.' number-one position in low-pay work: The U.S. minimum wage is too low, economic growth doesn't necessarily lift poor people's wages, less social spending by the government is correlated with worse wages for poor people, low-wage work usually is not a stepping-stone to well-paying jobs, and working a low-wage job can often create additional problems other than the paltry pay.

The federal minimum wage has been $7.25 per hour since 2009, according to the Labor Department. That amounts to just $15,080 per year for a person that works 40 hours per week during every week of the year: roughly equivalent to the poverty line for a two-person household.

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