Labor Markets and the Working Poor in the West Coast States


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In each of the three west coast states we find that, more often than not, poor families had at least one working family member in 2009. As shown in the figure below, at least two thirds of families living below the poverty line in California (69%), Oregon (69%) and Washington (67%) had at least one working family member. However, the number of poor families with at least one working member dropped by at least 2 percentage points in each of the west coast states between 2008 and 2009.

Can a Minimum Wage Worker Stay Above the Poverty Line?

Since July 2009, the federal hourly minimum wage has been $7.25. In the majority of states, the state minimum wage is the same as the federal minimum wage, but where they differ, the higher standard applies. Given 2009 poverty thresholds (the latest year available), a full time worker in a family of four with two children and no other workers would need to earn $10.46 per hour to keep the family above the poverty line. In states where the state minimum wage was the same as the federal wage, there was a $3.91 per hour difference between the minimum wage and the wage needed to live above the poverty line for a family of four in 2009.

The table below shows the state minimum wages in the west coast states of California, Oregon, and Washington in 2009 as well as the gap between what a worker would earn for full-time, year-round work at minimum wage and the federal poverty level. No state’s minimum wage was sufficient to raise a full-time worker over the poverty threshold for a family of four (if they are the only source of income in the family) in 2009 but the gap between the state minimum wage and the poverty line wage was smallest in Washington ($1.91) and Oregon ($2.06).  In California the gap was $2.46.

 

Because the state minimum wages in California, Oregon and Washington are higher than the federal minimum wage and have been increased more frequently, minimum wage work in these states brings a worker and her family closer to the poverty threshold for a family of four than does the federal minimum wage (69% in 2009). As shown in the figure below, a minimum wage worker in California in 2009 earned a slightly higher percentage of the four person poverty threshold (75.5%) than did a minimum wage worker in 1980 (72%). The disparity between the state minimum wage and the poverty line was greatest in 1996 when the annual earnings of a minimum wage worker were just 56% of the poverty line.

As shown in the figure below, a minimum wage worker in Oregon in 2009 also earned more, relative to the poverty line for a family of four, than a minimum wage worker in 1980. In 1980, a minimum wage worker in Oregon made 72% of the poverty line at that time, whereas the same worker in 2009 earned an amount equal to about 79.2% of the poverty line for a family of four.
 

In Washington, a minimum wage worker's earnings would have put a family of four at 77% of the federal poverty threshold in 1980. Thanks to increases beginning in the year 2000, minimum wage earnings in 2009 would put a family of four at 81 percent of the poverty threshold.