Skip to main content
The FRED® Blog

Comparing the minimum wage with the average wage

You’ve likely seen discussions about the minimum wage in the news and in the FRED Blog. We’ve discussed

Today, we approach the topic from a different perspective. In the FRED graph above, the blue line tracks the fraction of the average weekly earnings for a person working full-time at the prevailing federal minimum wage. In other words, it shows how the minimum wage compares with the average wage.*

The blue line shoots upward every time Congress raises the federal minimum wage. And we have added a dashed custom line (in purple) to represent the average value of our calculation between January 1964 and January 2021. With a mean value of 44.45%, the hypothetical minimum-wage weekly earnings hit their high point of 57.39% of the average weekly earnings in February 1968. The low point in the graph was 33.47% in January 2021—the last available data at the time of this writing. For reference, the weekly earnings derived from a $15 per hour minimum wage (currently under discussion by policymakers) would amount to 69% of last month’s average weekly earnings.

*Specifically, the graph compares the average weekly earnings of production and nonsupervisory employees with the earnings of those who  work 40 hours per week at the federal minimum wage. The formula we use is (federal minimum hourly wage x 40 hours / average weekly earnings) x 100. Also keep in mind that minimum wage workers are part of the pool from which the average is taken.

How this graph was created: Search for and select “Federal Minimum Hourly Wage for Nonfarm Workers for the United States.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Average Weekly Earnings of Production and Nonsupervisory Employees, Total Private.” Next, create a custom formula to combine the series by typing in “((a*40)/b)*100” and clicking “Apply.” Next, use the “Add Line” tab to create a user-defined line. Create a line with start and end values of 44.45. To change the line colors, use the choices in the “Format” tab.

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: CES0500000030, FEDMINNFRWG

The growing share of spending on recreation

It's not all fun and games, but there's definitely more

The FRED Blog illuminates interesting graphs from the growing library of FRED data. We often discuss heady and thoughtful topics, but we also showcase the fun side of data. And from the looks of today’s graph, we’re not alone in seeking out the sunny side of the street…

The FRED graph above shows the percent of real personal consumption expenditures devoted to recreational goods and services. Between 2002 and 2019, this share has almost constantly increased. (The sole exception being the dip between 2008 and 2009, during the Great Recession.) To be precise, the share of recreational expenditures has increased 57%, which is worth more than half a smile.

In a recent post, we saw that at least some forms of recreation were booming even during the pandemic in 2020. Sales at sporting goods, hobby, musical instrument, and book stores from July 2019 to July 2020 increased 18.7%. We’ll be sure to revisit this topic when more data come in.

How this graph was created: Search for and select “Real personal consumption expenditures: Durable goods: Recreational goods and vehicles.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Real personal consumption expenditures: Recreation services” and “Real Personal Consumption Expenditures.” Next, create a custom formula to combine the series by typing in ((a+b)/c)*100 and clicking “Apply.”

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: DRCARX1A020NBEA, DREQRX1A020NBEA, PCECCA

Spending on tobacco products and smoking supplies over time and across groups

Last week, we used data from the Consumer Expenditure Surveys to discuss changes in what people spend on reading materials. Here, we use the same data release to look at what people spend on tobacco products and smoking supplies.

Our first FRED graph shows that, between 1986 and 2019, overall spending on tobacco/smoking decreased for the sum total of all surveyed households. We’ve adjusted the annual dollar figures by the consumer price index for these products to account for their changing price over time. (FYI: The nominal figure for these expenditures in 2019 is $320 per household.)

Last week, we sorted the survey data by age group; here, we sort them by educational attainment, shown in our second, colorful FRED graph.

The share of these expenditures decreases as the level of educational attainment increases. In 2012, households with at most a high school degree made up 47.3% of the overall spending, and households with a bachelor’s or postgraduate degree made up 15.4%. Given the consistent sizes of each colored area in the graph, we can see that the relative shares have been fairly constant, at least since data were first collected in 1996.

Be aware that these patterns across groups might cloud some of the socio-demographic factors at play here. Savvy economic research often considers those factors. And speaking of savvy, read the work of Michael Darden, Julie Hotchkiss, and Melinda Pitts for more insight into the connection between smoking, educational attainment, and wages.

How these graphs were created: For the first graph, search for and select “Expenditures: Tobacco Products and Smoking Supplies: All Consumer Units.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Consumer Price Index for All Urban Consumers: Tobacco and Smoking Products in U.S. City Average.” Next, create a custom formula to combine the series by typing in “a/b*100” and clicking “Apply.”

For the second graph, search for and select “Expenditures: Tobacco Products and Smoking Supplies by Education: Master’s, Professional, Doctorate.” From the “Edit Graph” menu, use the “Add Line” tab to search for “Expenditures: Tobacco Products and Smoking Supplies by Education: Bachelor’s Degree.” Repeat the last step to add the same series for the other education levels (associate degree, high school with some college, high school, and less than high school). Next, use the “Format” tab to change graph type to “Area” and stacked “Percent.”

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: CUSR0000SEGA, CXUTOBACCOLB0101M, CXUTOBACCOLB1303M, CXUTOBACCOLB1304M, CXUTOBACCOLB1305M, CXUTOBACCOLB1306M, CXUTOBACCOLB1308M, CXUTOBACCOLB1309M


Subscribe to the FRED newsletter


Follow us

Back to Top