Working Poor

The working poor describes those who are employed but whose income is below the poverty line established by the government. In most countries that maintain such statistics, the poverty line is a fixed amount in real dollars and is typically only adjusted for inflation. Many countries, including the United States, Canada, Italy, Spain, and the United Kingdom, have significant portions of their populations that fall into the category of the working poor.

Overview

The World Bank estimated in 2015 that about 2.2 billion people around the world suffer from extreme poverty, earning less than the US equivalent to $2 a day. Many of these people work as subsistence farmers, and many are refugees from war-torn countries. However, in the industrialized world and in many democratic countries, the working poor are those whose jobs do not earn them sufficient funds for food, clothing, and shelter for themselves and their families. They typically do not have access to health insurance and have little in the way of a social safety net should they be fired or laid off from their jobs. The US Bureau of Labor Statistics (BLS) defines the working poor as those who are part of the labor force for at least twenty-seven weeks of the year but have incomes below the official poverty measure.

The United States has two measures of poverty: the yearly poverty thresholds as set by the Census Bureau, which are used for developing statistics, and the poverty guidelines set by the Department of Health and Human Services, used for administrative tasks. In the United States, the 2015 poverty line was established at $24,250 per year for a family of four. A person working full-time at the national 2015 minimum wage of $7.25 per hour makes only $15,080.

The working poor face a number of challenges that contribute to their precarious economic status. These include high risk of layoff, lack of opportunities to increase job skills, lack of significant raises, inability to work overtime, inflexibility in scheduling, medical situations that limit their ability to work, ineligibility for government aid programs, lack of reliable transportation, and lack of pension plans and access to 401(k) programs. Certain segments of the population are more likely become members of the working poor, especially those who have grown up in poverty and women. Women comprised more than 55 percent of the working poor population in 2012, often serving as the primary breadwinners for their families.

The working poor are less likely to have earned a high school or college degree than those of higher economic brackets. According to a 1999 study conducted by Jay Zagorsky at Ohio State University, almost one-third of the working poor have significant health limitations or medical conditions that affect their ability to work consistently and for long periods of time. Many of the working poor do not qualify for some government assistance programs and cannot to afford higher education or work training programs or healthcare, often because their employers do not offer such options. Described as working from paycheck to paycheck, the working poor are usually unable to remove themselves from the cycle of poverty without the assistance of anti-poverty policies and programs.

Many governments, including the United States, and international organizations, such as the World Bank and the United Nations, actively participate in and implement a variety of policies and initiatives aimed at alleviating the burdens of the working poor. In the United States, these initiatives include increasing the minimum wage, investing in education opportunities at all levels, creating work training programs, increasing the availability of affordable healthcare, and reducing the working poor’s tax burden. These initiatives are intended to help individuals and families improve their economic status directly and narrow the disparity gap between the lower and higher income segments of the population, indirectly improving the overall economic stability of a nation.

Bibliography

Boushey, H. “The Working Poor: Invisible in Low-Wage America: How Employers Are Shaping Opportunity in the Workplace. Working USA 8.1 (2004): 104–09. Print.

Cormier, D., and C. Craypo. “The Working Poor and the Working of American Labour Markets.” Cambridge Journal of Economics 24.6 (2000): 691–708. Print.

Fields, Gary S. “Aid, Growth and Jobs.” WIDER Angle. United Nations U, World Inst. for Dev. Economics Research. Oct. 2012. Web. 2 Aug. 2013.

Kneebone, Elizabeth, and Alan Berube. Confronting Suburban Poverty in America. Washington: Brookings Inst., 2013. Print.

Ladd, Helen. “Education and Poverty: Confronting the Evidence.” Journal of Policy Analysis and Management 31.2 (2012): 203–27. Print.

Shipler, David K. The Working Poor: Invisible in America. New York: Knopf, 2004. Print.

Stewart, James. “Aid Poverty and the Working Poor.” Economic Development. United Nations U. 2 Apr. 2013. Web. 2 Aug. 2013.

United States. Bureau of Labor Statistics. "A Profile of the Working Poor, 2012." BLS.gov. BLS, March 2014. Web. 30 Jun. 2015.

United States. Department of Health & Human Services. “2015 Poverty Guidelines.” ASPE.HHS.gov. US Dept. of Health and Human Services, 2015. Web. 30 June 2015.

Valdez, Adrienne. “Welfare, the Working Poor, and Labor.” Labor Studies Journal 30.2 (2005): 104–05. Print.