We must focus on the working poor
In many respects the economy is healing, as both the unemployment rate and hiring statistics slowly improve. But there are growing numbers of Americans being left out.
These are not just the unemployed. Rather they are families that, despite having a working adult in the home, earn less than twice the federal poverty income threshold – a widely recognized measure of family self-sufficiency. They are working, but making too little to build economically secure lives. And their number has grown steadily over the past five years.
They are cashiers and clerks, nursing assistants and lab technicians, truck drivers and waiters. Either they are unable to find good, full-time jobs, or their incomes are inadequate and their prospects for advancement are poor.
New analysis of the most recent U.S. Census American Community Survey by the Working Poor Families Project shows that the number of low-income working families in the United States has increased to 10.4 million in 2011, up from 10.2 million a year earlier. In all, nearly one third of all working families – 32 percent – may not have enough money to meet basic needs.
These stark figures should be on the minds of policymakers in 2013. They should make it a priority to bolster these working families’ economic opportunities by preserving funding for education, training and other programs that help working adults prepare for better jobs and by enacting policies that improve the availability of high-quality jobs.
The report, “Low-Income Working Families: The Growing Economic Gap,” shows that the total number of people in low-income working families now stands at 47.5 million, and that number could reach 50 million in the next few years. More than a third of children living in families with a working adult (23.5 million) are being raised in low-income circumstances.
These low-income families are disproportionately headed by minorities, with some of the largest increases in states such as Connecticut, Georgia, Illinois and California.
People are beginning to return to work as the national unemployment rate creeps down, but they are often taking jobs with lower wages and less job security than they had before the downturn. These low-wage jobs typically offer limited opportunities for advancement, few (if any) benefits, and create challenges for parents trying to balance work and family responsibilities.
A growth in these sub-quality jobs is accelerating the nation’s income inequality. New data show that the higher-income families take home 10 times the income of families at the bottom of the income distribution. Those at the top have seen incomes rise while those at the bottom have experienced stagnant or declining income. The disparity has grown consistently over the past five years.
In many cases, low-wage workers are involuntarily working part-time – often in multiple, temporary jobs. If it remains unaddressed, the trend is likely to continue, pushing more families into economic uncertainty, fueling greater income inequality and dampening national economic growth.
Some policymakers recognize this and are looking for solutions. Congress recently extended the Earned Income Tax Credit and the Child Care Tax Credit, which provide important financial support to many working families.
Many state leaders are recognizing that, in today’s economy, workers need to have some level of post-secondary education to compete for middle-class jobs. They are adopting new approaches to improve job quality, support working families and create opportunities for workers to build skills and move into better-paying jobs.
Colorado, for example, recently passed legislation to better match the needs of employers with the training programs being offered to students in college and workforce programs.
Massachusetts, despite a tough fiscal climate, earmarked millions of dollars to prepare residents for new jobs in high-demand occupations, giving them a pathway to good jobs. And Michigan passed a “work-sharing” bill, which will allow more workers to remain in at least part-time jobs when companies downsize, and receive partial unemployment benefits.
But all policymakers still have important decisions to make. In budgeting, they must protect investments in things like skills training and financial aid for college – the surest path to a better-paying job. At the same time, they should strengthen policies that will improve the economic security of working families through such measures as minimum wage increases and paid sick leave, policies that do not affect state budgets.
It is time to give priority to the needs and aspirations of America’s working families with the goal of restoring their paths to economic security, as well as ensuring economic opportunity for future generations.
PHOTO: A protester holds up a sign at a demonstration outside McDonald’s in Times Square in support of employees on strike at various fast-food chains in New York November 29, 2012. REUTERS/Andrew Kelly