eases if the minimum wage rises. For these reasons, Table 4.40 also includes other low-wage workers who would gain from the “spillover effect” of a higher minimum wage. The table presents information on these workers in the column labeled “Indirectly,” a group totaling 8.9 million workers, or 7.0 percent of the workforce. The increase would affect 19.5 million workers directly, or 15.3 percent of the workforce. In total, the change in the minimum wage to $9.80 would affect a substantial group, 28.4 million workers, or 22.3 percent of the workforce. By this metric over a fifth of the workforce has been affected by the eroded value of the minimum wage.
A higher minimum wage would disproportionately affect women: They constitute a majority (54.5 percent) of those who would benefit, greater than their 48.3 percent share of the workforce. The vast majority (87.9 percent) of those who would be affected by the higher minimum wage are age 20 or over; thus, it is clear the increase would not mainly benefit teenagers. Similarly, single parents would disproportionately benefit from a higher minimum wage: 10.4 percent of those who would be affected are single parents, higher than their 7.5 percent share of the workforce. In addition, many beneficiaries (17.6 percent of the total) of the proposed minimum-wage increase are parents in a married-couple family; this share is less than their 27.2 percent share of the workforce. While minorities are disproportionately represented among the potential beneficiaries (23.6 and 14.2 percent are, respectively, Hispanic and African American), the majority, 56.1 percent, are white. A majority (54.1 percent) also work full time (at least 35 hours weekly), and another 30.9 percent work at least 20 hours but less than 35 hours each week.
Table 4.40 also shows that the beneficiaries of a potential minimum-wage increase are disproportionately concentrated in the retail and hospitality industries (42.8 percent are employed there, compared with just 21.1 percent of all workers), while other industries are underrepresented among this group. The demographic breakdown of those affected by the spillover effects of the proposed increase—those indirectly affected—is more inclusive of full-time and adult workers but has a similar racial/ethnic breakdown as the group directly affected.
The impact of the recent and proposed increases in the federal minimum wage is diminished somewhat compared with that of earlier increases because a substantial number of states have raised their own minimum-wage levels in recent years, reducing the number of workers affected by any proposed federal change. Figure 4AF contrasts the real value of the federal minimum wage with the share of the workforce covered by legislated state minimum wages that exceed the federal level. In 2007 31 states that were home to 70 percent of the nation’s workforce had a minimum wage exceeding the federal level. By 2011 the number had declined to 17 states and about 41 percent of the workforce.
Another way to assess the importance of the minimum wage is to measure the share of total hours worked by workers earning at or below (some workers are not covered by minimum-wage laws) the legislated minimum (both federal and state). Figure 4AG illustrates that the minimum wage has been more important in setting a floor for women than for men and that there was a substantial erosion of the importance of the minimum wage for women in the 1980s. Since then the share of hours worked at or below the minimum wage has remained fairly low, except for a slight trend upward in the mid-2000s. It is notable that the 50/10 wage gap among women grew tremendously (as the 10th-percentile wage fell) in the 1980s, at the same time as the share of total hours worked by women workers earning at or below the legislated minimum fell.
Table 4.41 shows the impact of the minimum wage (including spillover impacts affecting workers just above the minimum) on the 50/10 wage gap among women, men, and overall in the years 1979–1991, when the value of the minimum wage eroded significantly,