According to the U.S. Census Bureau, the categories most associated with the working poor are (a) people who work, but who nevertheless fall under the official definition of poverty; (b) people who are in poverty and have at least one working family member; or (c) people who may not necessarily be “in poverty,” according to the official measure of poverty, but who fall below some percentage of the poverty level (e.g., 200 percent of poverty). The working poor are defined as those who have spent at least 27 weeks in the labor force during a year. To be classified as working, individuals must be employed or actively searching for work. The number of individuals under the poverty line was 37 million, or 12.7 percent, of the population in 2004. Of this population the U.S. Department of Labor estimates that 7.8 million individuals were classified as working poor, which represents an increase of 1.8 million since 2000. Three out of five individuals classified as working poor work full-time. Overall, 5.6 percent of individuals in the workforce were classified as working poor in 2004.
Dropping out of high school increases the likelihood that an individual will be classified as working poor. For high school dropouts, 15.2 percent, as opposed to 1.7 percent of college graduates, fell into the category in 2004. Women are more likely than men to be defined as the working poor. The census shows that 6.2 percent of women and 5.0 percent of men are working and still under the poverty line. Race is also an indicator of working poverty. While 7 in 10 of the working poor are white, blacks and Latinos/as are twice as likely to fall into that category. Black working women are almost twice as likely to be working poor (12.5 percent) as black working men (7.2 percent). Family composition is also important in defining the working poor, with 8.8 percent of married couples, 13.1 percent of single men, and 22.6 percent of single women so classified.
Labor Market Problems
The plight of U.S. families under the poverty line became a policy focus in the 1960s. The War on Poverty reduced the number of people in poverty significantly, along with providing poor families means-tested assistance. Since that time the term working poor more often has been associated with low-wage workers. Economic, social, and labor market changes in the past 30 years have left unskilled, low-wage workers vulnerable, as average wages have declined and welfare reform has reduced supplemental resources. Concurrent trends negatively affecting the working poor include the growth of wealth and income inequality, deindustrialization, and increasing technology and educational requirements in the workforce.
In the past 30 years, real wages for workers who do not have a high school degree declined 19 percent and increased 16 percent for workers who have a college degree. Low wages are the most common problem of the working poor, with 62 percent not making sufficient income to raise them above the working poor threshold. Overall, 24 million jobs, or 20 percent of the total, cannot keep a family of four above the poverty level. The working poor are the most affected by wage stagnation. Stagnant average wages and a low minimum wage are causes of working poverty in the United States. The nation’s minimum wage remained unchanged at $5.15 an hour from 1997 to 2006. In 2007, Congress passed legislation to increase it to $5.85, with provisions for further increases to $6.55 in July 2008 and $7.25 in July 2009. Some fields of labor, such as tipped labor, remain exempt.
Other important changes affecting work include the relative decline of unions. Many of the working poor are in jobs with historically low levels of unionization. These trends reduce the value of unskilled and less-educated workers. In addition, automation, deindustrialization, and outsourcing have reduced the need for low-skilled industrial workers. This decline in unionized industrial jobs negatively affects less-educated and low-skilled workers particularly. Unskilled workers also fare worse in the temporary labor market, which has grown to almost one in three new jobs.
Prominent characteristics of the working poor include underemployment and involuntary part-time employment. The labor market segment most often classified as working poor are service industry workers, although two out of three individuals classified as working poor fall into three occupational categories: services, production, and transportation. The nation’s farm workers also are more likely to be working poor. With the count limited to documented workers, there are an estimated 4 million farm workers.
Other societal-level factors shaping the working poor include a lack of health insurance, benefits, and child care. The 1996 Temporary Assistance for Needy Families (TANF) legislation limited lifetime benefits to 5 years for cash assistance for welfare recipients. TANF has increased the number of working poor families who are struggling with child and health care. Welfare reform reduced the number of families on welfare from 5.1 million in 1996 to less than 2 million in 2004, but the average wage of individuals who have left welfare is $8 an hour.
Problems related to the access of sustainable employment, such as working poverty, are most acute in certain areas. Overall, poverty in rural areas is characterized by a greater concentration of working poor families than is poverty in other areas. While the working poor are dispersed throughout the United States, regions characterized by historical pockets of poverty such as Appalachia, the South, and Native reservations are more likely to contain concentrations of poverty and working poor households. Constricted opportunity structures and multiple social problems partially explain this situation. Generally, rural areas exhibit lower levels of educational obtainment and chronic underemployment than other areas. The percentage of families classified as low income ranges from 35 percent in Mississippi to 15 percent in Massachusetts.
Working Poor Households
Studies chronicling the lives and conditions of the nation’s working poor reveal a diverse population exhibiting numerous social problems ranging from bad personal choices to low levels of educational obtainment, poor health, disability, substandard housing, and limited opportunities. Many families classified as working poor exhibit a constellation of problems that have far-reaching impacts on families and children. Social problems faced by the working poor include domestic and sexual abuse. Social theorists point out that sexism and racism play a prominent role in those characterized as the working poor, especially for female-headed households. Most evident are concentrations of women and minorities in low-wage service jobs.
More than half of low-income working families pay more than a third of their income for housing. Nearly six of ten working poor families lack decent, affordable rental housing. Still, social observers are proclaiming the decline of the underclass as the concentration of poverty has changed because of a stronger economy, abortion and the reduction in unwanted pregnancies for poor women, welfare reforms reducing dependency, and greater dispersal of low-income housing. All of these causes have reduced the concentration of poverty in certain areas but have not offset low wages as a significant cause of poverty.
- Albelda, Randy and Chris Tilly. 1997. Glass Ceilings and Bottomless Pits: Women’s Work, Women Poverty. Boston: South End.
- Albelda, Randy and Ann Withhorn. 2002. Lost Ground: Welfare Reform, Poverty, and Beyond. Cambridge, MA: South End.
- Billings, Dwight and Kathleen M. Blee. 2000. The Road to Poverty: The Making of Hardship in Appalachia. New York: Cambridge University Press.
- Ehrenreich, Barbara. 2001. Nickel and Dimed: On Not Getting by in America. New York: Metropolitan Books.
- Shipler, David. 2004. The Working Poor: Invisible in America. New York: Knopf.
- S. Department of Labor. 2007. “A Profile of the Working Poor.” Report 1001. U.S. Bureau of Labor Statistics. Retrieved from https://www.bls.gov/opub/reports/working-poor/archive/workingpoor_2007.pdf
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