Large, Profitable Companies Employ Most Minimum-Wage Earners

By:  George Zornick

If you’ve ever had a conversation about the minimum wage with friends and family, you invariably hear an argument about how raising it would hurt small businesses.

There is compelling academic research that increasing the minimum wage doesn’t dramatically impact employment levels, but a new study released today underscores another important point—most people earning minimum wage work for large, profitable corporations.

The National Employment Law Project looked at Census data from 2009–11 and found that 66 percent of low-wage workers are employed by large businesses with over 100 employees. Moreover, it found that the fifty largest employers of low-wage workers have all recovered from the recession and are in strong financial positions:

  • 92 percent were profitable last year.

  • 78 percent have been profitable for the last three years.

  • 75 percent have higher revenues now than before the recession, and 73 percent have higher cash holdings.

  • 63 percent have higher operating margins than before the recession.

Also, the study found that at these fifty firms, executive compensation averaged $9.4 million, and they have returned $174.8 billion to shareholders in dividends or share buybacks in the past five years.

Low-wage workers are concentrated in the service industry, and dominate the following sectors:

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