Of the 6.1 million workers paid hourly rates in Texas in 2012, 282,000 earned exactly the prevailing federal minimum wage of $7.25 per hour, while 170,000 earned less, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that the 452,000 workers earning the federal minimum wage or less made up 7.5 percent of hourly-paid workers in the state. Nationwide, those earning the federal minimum or less accounted for 4.7 percent of the hourly-paid workforce. (The Texas minimum wage is equal to the prevailing federal minimum wage.)

In 2006, 173,000 hourly-paid workers earned the prevailing federal minimum wage or less in the state–the lowest level since data were first available in 1998; they accounted for 3.0 percent of all workers paid an hourly wage. (See chart 1.) In 2007, the federal minimum wage began increasing after holding steady for nearly a decade. The initial result in Texas was that more workers fell into this category, peaking at 550,000 in 2010 before declining in each of the last two years.

From 2011 to 2012, the proportion of hourly-paid workers in Texas who earned at or below the federal minimum wage declined from 8.0 to 7.5 percent. The percentage of workers earning less than the federal minimum fell 0.8 percentage point in 2012 to 2.8 percent, while the share earning exactly the minimum wage edged up 0.3 percentage point to 4.7 percent. Nationally, both ratios declined in 2012. Workers with earnings at the federal minimum wage fell to 2.1 percent of all those paid an hourly rate in the United States and workers with earnings below the federal minimum wage fell to 2.6 percent.

Of the 452,000 workers earning the prevailing federal minimum wage or less in Texas in 2012, 286,000, or 63 percent, were women. These women represented 9.7 percent of all women paid hourly rates in the state. Men accounted for 167,000, or 37 percent, of all Texas workers earning the prevailing minimum wage or less; they made up 5.4 percent of men who were paid hourly rates. (See table A.)

In 2012, Texas’ proportion of hourly-paid workers earning at or below the federal minimum wage ranked second among the 50 states and the District of Columbia. Idaho had the highest proportion of hourly-paid workers earning at or below the federal minimum wage, 7.7 percent. Two other states had shares of 7.0 percent or more, Oklahoma (7.2 percent) and Louisiana (7.1 percent). The states with the lowest percentage of hourly workers earning the minimum wage or below included Alaska, Oregon, California, Montana, and Washington, all at less than 2.0 percent. It should be noted that, as of January 1, 2013, 19 states and the District of Columbia had laws establishing minimum wage standards that exceeded the federal level of $7.25 per hour. (See table 1 and chart 2.)

Overall, wage and salary workers earning hourly rates in the state had median hourly earnings of $12.00 in 2012; nationally, the median was $12.80. The median hourly rates for men and women in Texas in 2012 were $13.05 and $10.84, respectively. (See table A.) For the nation, the comparable figures were $13.88 per hour for men and $11.99 per hour for women.

Technical Note

The Bureau of Labor Statistics’ data on minimum wage earners are derived from the Current Population Survey (CPS). This survey is conducted monthly for the Bureau of Labor Statistics by the U.S. Census Bureau, using a national sample of about 60,000 households, with coverage in all 50 states and the District of Columbia. The earnings data are collected from one-fourth of the CPS monthly sample. Data in this summary are annual averages.

Statistics based on the CPS data are subject to both sampling and nonsampling error. The differences among data for the states reflect, in part, variations in the occupation, industry, and age composition of each state’s labor force. In addition, sampling error for the state estimates is considerably larger than it is for the national data.

Minimum wage worker data, particularly levels, for each year are not strictly comparable with data for earlier years because of the introduction of revised population controls used in the CPS. For technical documentation and related information, including reliability of the CPS estimates, see www.bls.gov/cps/documentation.htm.

It should be noted that the presence of a sizable number of workers with reported wages below the minimum does not necessarily indicate violations of the Fair Labor Standards Act, as there are exemptions to the minimum wage provisions of the law. The estimates of the numbers of minimum and subminimum wage workers presented in the accompanying tables pertain to workers paid at hourly rates; salaried and other non-hourly workers are excluded. As such, the actual number of workers with earnings at or below the prevailing minimum is undoubtedly understated.

The prevailing Federal minimum wage was $2.90 in 1979, $3.10 in 1980, and $3.35 in 1981-89. The minimum wage rose to $3.80 in April 1990, $4.25 in April 1991, $4.75 in October 1996, and $5.15 in September 1997. On July 24, 2007, the Federal minimum wage increased to $5.85 per hour; on July 24, 2008, to $6.55 per hour; and on July 24, 2009, to $7.25 per hour.

The principal definitions used in connection with the earnings series in this release are described below:

Median hourly earnings. The median is the amount which divides a given earnings distribution into two equal groups, one having earnings above the median and the other having earnings below the median. The median is less sensitive to extreme wages than the mean; this makes it a better measure for highly skewed distributions.

Wage and salary workers. Workers age 16 and over who receive wages, salaries, commissions, tips, payment in kind, or piece rates. Data refer to earnings on a person’s sole or principal job. The group includes employees in both the private and public sectors but, for the purposes of the earnings series, excludes all self-employed persons, regardless of whether or not their businesses are incorporated.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.