tries 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, and over the longer period from 1979 to 2009. The results in Table 4.41 confirm that the deterioration in the minimum wage’s value had a much larger impact on wages of women than of men. Between 1979 and 2009 the erosion of the minimum wage explained about two-thirds (65.5 percent) of the large 25.2 (log percentage point) expansion of the 50/10 wage gap among women but just over a tenth (11.3 percent) of the smaller 5.3 expansion of the 50/10 wage gap among men. For workers overall more than half (57.0 percent) of the increase in the 50/10 wage gap from 1979 to 2009 was accounted for by the erosion of the minimum wage. Curiously, the impact of the minimum wage on the 50/10 wage gap was less from 1979 to 1991 than from 1979 to 2009 even though the major decline of the value of the minimum wage occurred in the 1980s. Still, about a third of the 50/10 wage gap expansion among women from 1979 to 1991 can be explained by the falling value of the minimum wage.
The level of the minimum wage strongly affects the wage gains of low-wage workers, particularly low-wage women whose wages over the last few decades have essentially been set by the legislated minimum. Thus, the erosion of the minimum wage’s value (along with high unemployment) led to a precipitous drop in the wages of low-wage women in the 1980s and to a large increase in the 50/10 wage gap. Wages among low-wage women (i.e., at the 10th percentile) stabilized in the late 1980s after these wages had descended close to their lowest possible level (i.e., near the minimum wage, where employers could still possibly hire) and as unemployment dropped. Thereafter, the 50/10 gap was flat or declined as unemployment fell to low levels in the late 1990s and as the federal government implemented two sets of increases in the minimum wage in the 1990s. Between 1999 and 2006, as the real value of the minimum wage eroded and unemployment rose, wage growth of low-wage women once again weakened, and the 50/10 wage gap grew. The legislated increases in the federal minimum wage th