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Rural Workers of Color Need a $15 Federal Minimum Wage

Laborers harvest yellow onions, April 2007.

The fight for a $15 minimum wage and the right to a union has long been tied to racial justice. Perhaps nowhere is the importance of robust federal labor law to racial equity more evident than in rural America, where state policy has eroded job quality over the past several decades.

The federal minimum wage has lost 21 percent of its purchasing value since it was last increased in 2009. Though many states have raised their minimum wages in response to the rising cost of living, the relatively rural states, such as Iowa and Alabama, have notably neglected to do so. As a result, rural workers are far more likely to live in a state with a minimum wage at or below the federal level than urban workers: 53.2 percent of rural workers live in states with an effective minimum wage of $7.25 compared to 34.7 percent of urban workers.

Rural workers are also more commonly located in so-called “right-to-work” states, which disarm unions by allowing workers to benefit from union contracts without paying the dues to cover the union’s bargaining activity: 63.9 percent of rural workers live in “right-to-work” states compared to 48.1 percent of urban workers. Such laws are associated with lower union density and lower wages. The median wages of men in “right-to-work” states are 13.9 percent lower than those in states without such laws, while women in “right-to-work” states make 15.5 percent less.

Rural workers of all genders and races stand to benefit immensely from a $15 federal minimum wage and the passage of the PRO Act, which removes several barriers to union organizing, including “right-to-work” laws. This column uses data from the Annual Supplemental Economic Supplement (ASEC) of the Current Population Survey (CPS) to quantify the benefits to rural workers of raising the federal minimum wage to $15 an hour. The analysis finds the following:

  • 39.5 percent of rural workers make less than $15 compared to 29.2 percent of urban workers.
  • The average low-wage rural worker would see an hourly raise of $6.89. This adds up to $275.60 of additional income a week for a full-time worker, or $14,331.20 a year.
  • In rural areas, 55.3 percent of Black workers make less than $15 compared to 36.9 percent of white workers. And 60.3 percent of Latino workers make less than $15.

Inequities in labor protection coverage in rural areas result from structural racism present since the very inception of federal labor law. State differences in labor policy leave many workers unprotected. A $15 federal minimum wage for all workers is urgently needed for rural workers—particularly rural workers of color, who are often those left most vulnerable.

Rural workers greatly benefit from a $15 minimum wage

Overall, 39.5 percent of workers in rural areas earn less than $15 an hour compared to 29.2 percent of urban workers. The average low-wage rural worker would see an hourly raise of $6.89. This adds up to $275.60 of additional income a week for a full-time worker, totaling $14,331.20 a year. Rural workers of color are more likely to benefit from the Raise the Wage Act than their urban counterparts and all white workers.

The equity implications of a $15 minimum wage would be large everywhere but even more so in rural America. Black, Hispanic, Asian Americans and Pacific Islanders, and other people of color in rural areas are much more likely to work for less than $15 an hour than their white counterparts. In rural areas, 55.3 of Black workers make less than $15 compared to 36.9 percent of white workers. 60.3 percent of Latino workers make less than $15. Among low-wage workers that would directly benefit from the Raise the Wage Act, rural workers would receive bigger raises than urban ones on average.

Figure 1

Figure 2

The minimum wage is a matter of racial justice

The low wages prevalent in rural America are not purely the product of market forces but also result from policy choices. Many commentators are quick to argue that lower wages reflect the lower cost of living in rural communities. This argument obscures both the economic reality of rural Americans and how structural racism shapes that reality.

Take, for example, “right-to-work” laws. These laws originated in the 1930s from a lobbyist named Vance Muse, who explicitly denounced the union movement because of the solidarity it built between Black and white workers, endangering segregation and the Southern power structure. To this day, states that formerly were segregated by law are more likely to have enacted “right-to-work” laws.

Another case of structural racism in the rural economy is the exemption of farm workers from many federal labor protections. In response to pushback from Southern lawmakers, the cornerstones of federal labor policy—the Fair Labor Standards Act and the National Labor Relations Act—excluded farmworkers. At the time, these workers were largely African American and, today, are overwhelmingly Latino. Farmworkers were not guaranteed the minimum wage until 1966 and are still not entitled to overtime pay or the right to unionize, resulting in a unionization rate of just 1 percent in the occupation. Thus, while the Raise the Wage Act is urgently needed, it must be accompanied by the expansion of the FLSA to fully cover all workers.

Although some conservatives contend that the cost of living in rural areas is cheaper and therefore a living wage there would be lower, evidence of differences in cost of living is mixed and is sensitive to differences in measurement and methodology. Though some rural areas may have price advantages compared to urban ones, some household costs can be higher, such as transportation and health insurance. Other costs, such as housing, are burdensome across the country. According to the Low-Income Housing Coalition, there is no state in the country in which one worker can afford to rent a two-bedroom home on less than $14.60 an hour.

Conclusion

The proportion of rural workers living in states with an effective minimum wage of $7.25 or a “right-to-work” state is much higher than the proportion of workers in urban areas. As a result of structural racism embedded within the history of U.S. labor law, Black and Latino workers in rural areas are much more likely to earn low wages. Consequently, rural workers of color are more likely to benefit from an increase in the federal minimum wage than their white counterparts or urban counterparts.

Caius Z. Willingham is a research associate for the Economic Policy team at the Center for American Progress.

Author’s note: Due to limitations of the available data, the author defines “rural” to mean outside of a metropolitan area and “urban” to mean within a metropolitan area. “Low wage” is defined as less than $15 per hour and all calculations assume a 40-hour work week and 52 work weeks a year. The five demographic categories used in this figure are based on a combination of questions asked in the Current Population Survey. For the purposes of this piece, “Latino” is defined as someone who does not identify their race as white and identifies their ethnicity as Hispanic or Latino.

Willingham previously published under the name Zoe Willingham.