1 in 4 Working Families Now Low-Wage, Report Finds
Wednesday, October 15, 2008
The ranks of low-wage working families increased by 350,000 between 2002 and 2006, raising their numbers to nearly 9.6 million, or more than one in four of the nation's working families with children.
The report by the Working Poor Families Project, an advocacy group that analyzed census data, defined low-wage families as those earning less than double the poverty rate. For a family of four, that would have been an annual income of $41,228 or less in 2006. The report's author, Brandon G. Roberts, attributed the increase to the growth in low-paying jobs, from health-care aides to cashiers, that form an increasing share of the nation's service-based economy.
Many of those families struggle to pay for basics, such as health care, food and housing, a battle that Roberts said has grown more acute in the past two years as the economy has stagnated.
"The stark reality is that too many American families have been in economic crisis long before this year," said Roberts, director of the non-partisan Working Poor Families Project, which advocates for state policies to improve the lives of low-income working families. "Even before this year's economic crisis, the conditions for working families were getting worse, not better."
The report adds to the growing body of data illustrating that the dynamics of the modern economy have been unkind to many working Americans. Even as the economy grew at a generally robust pace from 2002 to 2006, fewer jobs were created than in previous economic expansions. And some 4.7 million of the jobs that were created paid salaries that would leave a family of four in poverty, according to the report. Overall, the report said, more than one in five jobs in in 2006 paid poverty-level wages.
The low pay leaves many families struggling to get by, as essentials consume a huge portion of their pay. "Low-income working families pay a higher percentage of their income for housing than other working families and are far less likely to have health insurance," the report said.
Entitled "Still Working Hard, Still Falling Short," the report was funded by grants from the Annie E. Casey, Ford, Joyce and Charles Stewart Mott foundations.
Even though low-wage families did not earn much, their breadwinners worked many hours -- an average of 2,552 hours per year in 2006, the equivalent of almost one and a quarter full-time workers per family. Also, 52 percent of the nation's low-income working families are headed by married couples.
The report said low-income families must become better educated if they are going to move up economically. While almost half of all job openings require more than a high school education, 88 million adult workers have only a high school education or less.
The report calls for stronger policies for working families at both the state and federal levels. It points to state policies that invest in education for working people. It also calls for increases in minimum wage above the federal wage standard, and support for initiatives such as paid parental level.
"State actions are only part of the answer. The federal government has a role and responsibility to ensure that all hard-working families have a true opportunity for economic advancement and success," the report said.