Économie et Statistique n° 448-449 - Minimum Wage - Victimization
Wage paths of private-sector workers paid at near-minimum wages: an empirical analysis on French data, 1995-2007
Do spells of minimum-wage work act as transitions to higher wages or, on the contrary, are they a sign of lastingly precarious wage paths? To answer this question, we selected a sample of workers paid at near-minimum hourly wages between 1995-2003 and tracked them for a five-year period. We had to develop a method for identifying these workers unambiguously, because several levels of minimum hourly wages were in effect at the time when France implemented a working-time reduction policy in the first half of the 2000s. We then distributed the sampled workers into six broad wage-path categories. The profiles of employees covered by each of these categories turn out to be remarkably individualized. The largest category consists of workers who move up to a higher hourly wage. They often have seniority in their firm or in the labour market. By contrast, the smallest category comprises workers who continue to earn near-minimum wages throughout the five-year period studied. They often consist of women, manual workers, clerical workers, or people who have spent more time in the labour market. Between these two profiles, some workers follow more irregular paths or move out of the scope of our study. They include employees who move from near-minimum hourly wages to “out of scope” wages and back again, sometimes with transitions to higher wages. They often consist of young people with less experience in their jobs or in the labour market. Workers who move out of scope without increasing their earnings are often older. They likely consist of employees retiring at the end of their working careers.