5 Myths about Low-Wage Workers in California

Enrique Lopezliraand Kuochih Huang

What do we know about California’s low-wage workers? The UC Berkeley Labor Center recently released an update of its Low-Wage Work in California Data Explorer, which provides a wide range of data on California’s 4.3 million low-wage workers. Since the mid-1990s, California workers earning low wages have experienced much slower real wage growth than workers earning higher wages, dramatically increasing wage inequality in the state. Even the increase in the state minimum wage to $15 an hour and recent wage growth have not fundamentally changed this trend. In this blog we will use the Low-Wage Data Explorer to dispel some myths about the one-in-three workers in California who are paid low wages.

Myth 1: Low-wage workers are young

When most people think about low-wage jobs, they think of fast-food establishments, which tend to hire lots of teenagers. As a result, people associate low-wage work with young workers. Although it is true that the average age of low-wage workers is lower than that of the overall workforce, almost 60% of low-wage workers in California are over the age of 30.

Furthermore, the share of low-wage workers in their teens and 20s has decreased by 20% since 1994. Over that same period, the share of low-wage workers over age 40 has increased 50%. So the low-wage workforce in the state now is much older than in previous decades.

Myth 2: Low-wage workers are low skill

A big misconception about workers in low-wage occupations is that they are earning a wage commensurate with their level of skill. Usually, the proxy used for evaluating skill among workers is educational attainment. The perception is that low-wage workers have little to no education.

It is true that, on average, workers who are paid low wages have lower educational attainment than the overall workforce. However, almost half of all low-wage workers have attended college. And, more than 10% of low-wage workers have a bachelor’s degree or higher. Since 1994, the share of low-wage workers without a high school diploma has decreased almost 40%, while the share of low-wage workers with at least a two-year college degree has increased more than 50% over the same period. Workers who are paid low wages in California are more educated now than in previous decades.

Myth 3: Workers in low-wage occupations are not trying to live and raise a family on these jobs

Because people associate teenagers with low-wage jobs (see myth 1 above), a big misconception is that workers do not really expect to live and raise a family on low-wage jobs. The reality is quite the opposite. About four out of ten low-wage workers in the state are the sole earners in their families. Over 40% of low-wage workers are married, and 20% have children.

However, the median family earnings of low-wage workers are about half the family earnings of all other workers in the state. These low earnings lead to economic insecurity for low-wage workers and their families. Low-wage workers are more likely to have children receiving free or reduced price school lunch, to have a family member enrolled in Medi-Cal, to be rent burdened, and to live in poverty. Almost half of low-wage workers in California live in families with earnings below 200% of the federal poverty level ($43,920 for a family of three in 2021).

Myth 4: Low-wage work is primarily part-time work

Many of us held a low-wage job while in school. This gave us the flexibility to earn some money and continue our studies. Because of these experiences, a widely-held perception is that most low-wage jobs are part time.

Although low-wage workers are two times more likely to work part time than the state’s workforce overall, two out of every three low-wage workers are full-time workers. Furthermore, many part-time low-wage workers would prefer to do full-time work. This is called involuntary part-time employment. Low-wage workers are also more likely than the workforce overall to work part year (less than 50 weeks), again, often involuntarily.

Involuntary part-time and part-year employment is a problem for low-wage workers, leading to even lower earnings and subsequently more difficulty providing for their families. The median annual earnings for full-time low-wage workers in California were $25,000 in 2021, and only $12,000 for part-time workers.

Myth 5: Low-wage jobs only exist in some industries

Given the prevalence of low-wage jobs in restaurants and hotels, it is understandable to assume that low-wage jobs only exist in a few industries. The reality is that low-wage jobs are prevalent throughout California’s economy.

In California, industries (where a worker works) and occupations (what a worker does) with high rates of low-wage work include both service and goods-producing sectors. In terms of industries, retail and leisure and hospitality employ one-third of California’s low-wage workers. The most common low-wage occupations are retail salespersons, personal care aides, and cooks and food preparation workers.

Given official employment projections, California’s low-wage occupational and industry configuration will continue into the foreseeable future. Four of the top five occupations with the largest projected employment growth over the next ten years are low-wage occupations, which highlights the importance of having a good understanding of this workforce.