The minimum wage problem

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**Kimberly Adams** (0:31)
It's jobs day, but let's check in on wages as well. And one of many reasons folks choose to leave the labor force.
From Marketplace in Washington, I'm Kimberly Adams. We'll get the jobs report for August later this morning, a snapshot of which sectors of the economy are gaining and losing jobs, and how many people are out looking for work, ideally well-paying work, above the minimum wage. The federal minimum wage hasn't moved from $7.25 an hour since 1993, although it is higher in many states and localities. But some employers still violate minimum wage laws and underpay their workers. Researchers at the Federal Reserve Bank of Cleveland recently found that this is a growing problem, as Marketplace's Nancy Marshall Genzer reports.

**Nancy Marshall Gensler** (1:17)
Today, Yoo-Ha Kim is a research analyst at the Cleveland Fed. But as a teenager, he worked as a pizza delivery driver in Indiana.

**Yoo-Ha Kim** (1:27)
And there were some like really slow days where I was thinking to myself, am I at least earning like minimum wage right now?

**Nancy Marshall Gensler** (1:35)
Kim is 23 now, and he's still wondering if he was shortchanged. He decided to do some research on minimum wage violations, co-authoring a new report from the Cleveland Fed that finds, in the 10 most populous states, a record 5% of workers legally entitled to the minimum wage were actually paid below that last year. Kim says that may not sound like much, but...

**Yoo-Ha Kim** (1:58)
We're talking roughly 5 to 6 million workers.

**Nancy Marshall Gensler** (2:02)
Kim says underpayment is most common in hotels, grocery stores, and restaurants, or for people providing personal services like house cleaners or caregivers. Jen Round is with the Workplace Justice Lab at Northwestern University. She says underpayment can be a problem at businesses that hire subcontractors.

**Jen Round** (2:21)
They're going to try to undercut wages in order to provide the cheapest bid to win the contract.

**Nancy Marshall Gensler** (2:26)
The Cleveland Fed report says many states have limited staff to enforce their minimum wage laws, leaving workers to navigate the process of filing a complaint or a lawsuit on their own. I'm Nancy Marshall Gensler for Marketplace.

**Kimberly Adams** (2:40)
The average price for a gallon of diesel fuel is now $5.85, according to AAA.
That's the most expensive ever, and the reason is the six-month US war with Iran. Diesel is used by freight and delivery services, which drives up the costs to businesses and down-the-line consumers.

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**Kimberly Adams** (3:41)
One of the numbers we'll get in the jobs report later this morning is the labor force participation rate, which has been on the decline lately. More and more Americans have stopped working and are no longer looking for a job.
Part of that is because of the demographic fact that the US population is getting older, which means more people retiring. But it's also because of people leaving the workforce to take care of aging family members. Here's the next installment of our series, Clocked Out.

**Caroline Day** (4:09)
Hello, my name is Caroline and I'm living currently in Washington, DC.
I was an interior design entrepreneur for about 30 years. But I got to a point that I sort of thought I felt dulled down. And I went to a career counselor and she just said, the baby boomers are aging. I think you should go back and get your degree in gerontology.

**SPEAKER_1** (4:40)
And I was like, what?

**Caroline Day** (4:44)
And I just went and took to it. I was full steam ahead getting my master's degree and my parents came to visit me. I was living in San Francisco at the time where I had my business for 23 years and COVID hit.
They ended up being with me for 18 months and I was doing all the work. All the groceries, all the cleaning, all the cooking. And then I would go to my study at 11 p.m. and start writing essays till 3 o'clock in the morning. So I didn't intentionally leave my work. I was really starting a second chapter of my work. My father passed away in San Francisco and my mother wanted to come back to DC, and they had a beautiful row house. So I moved with my mom to live with her and asked if we did this, if I could remodel the house. It ended up being the biggest remodel I've ever done and probably the most successful because it was all for aging in place. So my mother currently lives in a lovely patio apartment, and I live on the upper two floors of the house, but I'm able to see her up and down every single day.