West Coast Labor Markets

The Working Poor in California, Oregon and Washington

In each of the three West Coast states we find that, more often than not, poor families had at least one working family member (over age 15) in 2005. As shown in the pie charts below, about two thirds of families living below the poverty line in California (63%), Oregon (67%) and Washington (66%) had at least one working family member. In California, one quarter of families living below poverty had one or more full time workers in the family.

• Link to data in Microsoft EXCEL file

Can a Minimum Wage Worker Stay Above the Poverty Line?

In 2006, the federal hourly minimum wage was $5.15, the level it has been since September, 1997. 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 2005 poverty thresholds (the latest year available), a full time worker in a family of four with two children would need to earn $9.52 per hour to keep the family above the poverty line. In the 34 states where the state minimum wage was the same as the federal wage, there is a $4.37 per hour difference between the minimum wage and the wage needed to live above the poverty line for a family of four.

The table below highlights the states where the state minimum wage exceeded the federal minimum wage in 2005. No state’s minimum wage is 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), but the gap between the state minimum wage and the poverty line wage was smallest in Washington ($2.17) and Oregon ($2.27), ranked 1st and 2nd respectively. California is ranked 6th (in a three way tie with Massachusetts and Rhode Island) with a $2.77 gap.

Chart Source: West Coast Poverty Center calculations based on University of Kentucky Poverty Center and U.S. Census Bureau data; * poverty line for a family of four with two children in 2005.

• Reference showing 2006 state minimum wages and state laws pertaining to the minimum wage: http://www.dol.gov/esa/minwage/america.htm

Because the state minimum wages in California, Oregon and Washington are higher than the federal minimum wage and have been increased more frequently, they are less far below the poverty threshold for a family of four than is the federal minimum wage. As shown in the figure below,, a minimum wage worker in California in 2005, earned a lower percentage of the four person poverty threshold (71%) than did a minimum wage worker in 1980 (77%). The disparity between the state minimum wage and the poverty line was greatest in 1996, when the annual earnings of a minimum wage worker ($8,840) were just 55.6% of the poverty line.

• Link to data in Microsoft EXCEL file

As shown in the figure below, a minimum wage worker in Oregon in 2005 earned slightly 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 $6,032, which was about 72% of the poverty line at that time, whereas the same worker in 2005 earned $15,080, equal to about 76% of the poverty line for a family of four in 2005.

In Washington, thanks to increases beginning in the year 2000, the minimum wage is the same, relative to the poverty line, as it was in 1980 (77%).

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