Can you support a family on $7.25 an hour — the federal minimum wage?
Probably not, but there’s good news for workers in the lowest quarter of the economic ladder: Their wages are growing at levels not seen since 2009.
Read more: Costco is raising its minimum wage and here’s why
Minimum wage growth among the nation’s lowest-paid workers
Full-time workers in the 25th percentile — those who make around $13 an hour — are enjoying the fruits of a tightening labor market and a corporate-led trend toward higher wages. The Labor Department says their average wage is up 3.1% from the same time last year.
The bump in pay for lower-income workers has been led by some high-profile companies, according to the Wall Street Journal. Chase has announced a pay increase for 18,000 workers to at least $12 an hour. Starbucks also stepped up to the plate with a minimum 5% pay hike for it employees this year.
But perhaps the biggest mover in this regard has been Walmart.
As the world’s largest private employer, Walmart was among the first of several companies to announce pay hikes for all its hourly retail employees. Among the initiatives being rolled out this year on the pay front:
- All associates hired before Jan. 1, 2016 will earn at least $10/hour.
- New entry-level associates will continue to start at $9/hour and move to at least $10/hour after successfully completing the company’s new retail skills and training program known as Pathways.
- Associates already earning more than $10/hour received an annual pay increase in February rather than having to wait until their anniversary date.
- Walmart is raising the starting rate of its non-entry level hourly pay bands. Anyone earning below the new minimum will automatically move up to the new minimum.
- Associates at or above their pay band maximum will receive a one-time lump sum payment equal to 2% of their annual pay.
- Thanks to these changes, Walmart’s average full-time hourly wage will be $13.38/hour. The average part-time hourly wage will be $10.58/hour.
Of course, such moves do come at a cost to consumers. Starbucks has had to raise prices on select drinks and put restrictions on its rewards program, as just two examples.
Living on minimum wage? Look for job-related ways to reduce your overhead
If you’re living on minimum wage, you’ve got to try to find a job with as many perks as possible:
- Food service workers may seek employers who offer free lunch and the option to take home leftovers (thereby reducing your grocery bill). This situation is more common in smaller, locally owned cafes rather than larger establishments.
- Educational positions offer you the ability to work at your child’s school, eliminating or reducing the need for child care.
- Like to travel? Apply to airline and long-distance bus positions, as these companies often offer free or discounted travel during your vacation period.
- Also consider applying for work where you pay your bills and you could receive a discount for that bill. For example, working for an apartment complex may result in reduced rent; working for the phone or cable company may reduce those bills, and working at grocery or retail stores may give you first knowledge of new sales with discounts.
Read more: How to better handle your finances on a low income
