Jobs Above and Below the Minimum Wage Line

Our regular readers know we periodically experiment with different ways of visualizing data. Today’s experiment shows how the number of jobs paying wages or salaries above and below the federal minimum wage has changed in each year since 2006.

Here, we’ve adapted the candlestick charts used to communicate stock price changes over time to instead indicate the number of jobs that existed at various wage levels in 2006 with the actual number of jobs at the same reference wage levels in the years from 2006 through 2010.

In the chart above, the large purple bands indicate the actual number of employed individuals in the U.S. for each year shown. The black bands that appear either above or below the purple bands indicate the additional number of jobs that existed in 2006 that no longer existed in subsequent years, whether above the minimum wage level (indicated by the horizontal axis), or below it. We then added the numerical data above and below each band to indicate the relative change in the number of jobs either above or below the minimum wage line with respect to the levels recorded at the time-weighted1 indicated wage levels in 2006.

Here’s what we see as we read the chart from left to right. 2007, the first year in which we have a federal minimum wage increase, saw 402,850 jobs lost from the U.S. economy below the time-weighted minimum wage level for that year, while the otherwise growing economy added 2,033,767 jobs above the minimum wage line. We know that the jobs below the minimum wage line were lost, rather than shifted above the line, because the number of employed teens and young adults, the individuals most likely to have jobs earning the minimum wage, declined significantly between 2006 and 2007.

In 2008, the economy added some 46,482 jobs above the time-weighted minimum wage line for that year, raising the total difference from 2006′s job level above the federal minimum wage level to 2,080,249, but shed 1,128,832 jobs paying the federal minimum wage or less.

It’s not until 2009 that we see the effects of the recession that was declared to have begun in December 2007, and specifically, the result of the bottom dropping out of the U.S. automotive industry in late 2008, affect the relative number of jobs that existed above the time-weighted federal minimum wage level. Here, 4,919,970 jobs paying more than the federal minimum wage were lost in 2009, bringing the total number of jobs paying more than the federal minimum wage to be 2,839,721 below the number of jobs paying more than the indicated time-weighted wage levels in 2006.

Meanwhile, 1,691,445 jobs continued to be shed below the federal minimum wage line for that year, which saw the official end of the recession in June 2009.

For 2010, we see that the number of jobs above the federal minimum wage line continued to decline to be 3,117,617 below the level for the indicated wage level of $7.25 per hour that would have been recorded in 2006. Likewise, 2,234,383 fewer Americans earned $7.25 or less per hour in 2010 than did in 2006.

1 For those years in which there was more than one level of the federal minimum wage, we must take into account the amount of time for which each minimum wage level applied during the year in estimating the number of people earning the federal minimum wage or less. We did that by adding together the number of people estimated to be earning the lower indicated wage in 2006 multiplied by the fraction of the year at which that lower minimum wage rate applied and the number of people estimated to be earning the higher indicated wage in 2006 multiplied by the fraction of the year at which it applied. This process is similar to how the Bureau of Labor Statistics “counts” the number of people earning the federal minimum wage or less in years in which the federal minimum wage is changed.

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