Women working full time, year round typically make only 80 percent of what their male counterparts make—leaving a wage gap of 20 cents on the dollar. One reason for this wage gap is that women are concentrated in low-wage jobs: they are nearly two-thirds of minimum wage workers, and two-thirds of workers in tipped occupations are women. Women of color are particularly overrepresented among minimum wage and tipped workers. But raising the minimum wage can help close the wage gap by increasing wages for workers at the bottom of the spectrum—indeed, women working full time in states with a minimum wage of at least $8.25 per hour in fact face a wage gap that is 41 percent smaller than the wage gap in states that follow the federal minimum wage of $7.25 per hour. Raising the minimum wage and the tipped minimum wage are important steps toward equal pay for women, including women of color.
The Federal Minimum Wage & Tipped Minimum Wage
- The federal minimum wage is $7.25 per hour and the federal minimum cash wage for tipped workers is just $2.13 per hour.
- Neither minimum wage goes up unless Congress acts, which means they lose value every year. Congress has raised the minimum wage only four times in the past 40 years, and enacted the last increase a decade ago. The tipped minimum wage has been frozen for 26 years.
- A full time, year round minimum wage worker earns just $14,500—nearly $5,000 below the poverty line for a mother and two children.
States with higher-than-federal minimum wages tend to have smaller wage gaps.
- States with a minimum wage at or above $8.25 per hour have a gender wage gap of 13.5 cents—about 41 percent smaller than the gender wage gap of 23 cents in states with a $7.25 minimum wage.
- In 2015, nine of the ten states with the narrowest wage gaps had minimum wages above the federal level of $7.25 per hour—and six had minimum wages of at least $8.25 per hour. Among the ten states with the widest wage gaps, only four had a minimum wage above $7.25, and none had a minimum wage above $8.15 per hour.
Raising the minimum wage would especially help women, particularly women of color.
- In 2015, in 45 states and the District of Columbia, women were more than half of the workers making at or below the state’s minimum wage. In 30 states, women represented at least six in ten of the workers making at or below the state minimum wage, including 12 states where women represent at least seven in ten workers making at or below the state minimum wage.
- Women of color are particularly overrepresented among low-wage workers, and would therefore particularly benefit from a higher minimum wage. For example, according to the Economic Policy Institute, increasing the federal minimum wage to $15 per hour by 2024 would give one-third of all working women a raise—and that includes just over 37 percent of working women of color.
Raising the minimum wage and tipped minimum wage would help close the wage gap.
- In 2015, when comparing all women working full time, year round to all men, women were typically paid 80 cents for every dollar paid to their male counterparts. The wage gap was even larger for women of color: Black women working full time, year round typically made only 63 cents, and Latina women only 54 cents, for every dollar paid to their white, non-Hispanic male counterparts.
- By lifting wages for the lowest-paid workers, raising the minimum wage would likely narrow the range of wages paid to workers across the economy—and because women are the majority of workers who would see their pay go up, the wage gap would narrow as well.
- Ensuring that tipped workers are paid the regular minimum wage is a critical step to ensure a more stable and adequate base income for the typically low-paid and predominantly female tipped workforce. When tips plus wages fall short of bringing a tipped worker up to the standard minimum wage, employers are supposed to make up the difference, but often fail to do so. On average, in the states that currently require employers to pay the regular minimum wage before tips, poverty rates among women tipped workers are lower—and wage gaps for women tipped workers as well as women overall are smaller—than in states that follow the federal standard.