Recession forces rise in low-wage families, report says

From foreclosure to food shortages, the economic downturn set in motion by the financial crisis of 2008 is having a broad and deeply-felt global impact.
Washington Post Staff Writer
Tuesday, December 21, 2010; 12:00 AM

The Great Recession, responsible for boosting unemployment to its highest levels in a generation, has sharply increased the percentage of working people who earn wages so paltry that they are struggling to survive, according to a new report.

The share of working families earning less than double the official poverty threshold - $43,512 for a family of four - increased from 28 to 30 percent between 2007 and 2009, according to a report released Tuesday by the Working Families Project, a nonprofit group that advocates on behalf of the working poor.

Overall, the report said, the number of people living in low-income working families increased by 1.7 million to 45 million between 2008 and 2009. In November, the jobless rate rose to 9.8 percent, and has hovered near 10 percent for more than a year.

"Clearly, we are going in the wrong direction," said Brandon Roberts, a co-author of the report, derived from an analysis of Census Bureau data. "We are not making sufficient investments to help working families get ahead. Unfortunately, the constraints on the budget are going to make this even more difficult going forward."

President Obama has presided over large increases in education and job-training funding since taking office. But those efforts have been overwhelmed by the longest and deepest downturn since the Great Depression.

And now, with a spate of fiscal conservatives poised to enter Congress and with policymakers more tightly focused on the nation's huge budget deficit, the prospects of maintaining past spending levels on programs that help enable social mobility are dimming.

Many states also are reeling, causing them to raise college tuitions and, in some cases, consider cuts in public school funding.

The fortunes of low-wage families have been made more difficult by the toll the recession has taken on male workers, who are heavily concentrated in the hard-hit construction, manufacturing and financial sectors of the economy. Between 2007 and 2009, the share of working women with unemployed husbands more than doubled, to 5.4 percent.

Minority families were also among those found to be most vulnerable, the report said. In 2009, 43 percent of working families with at least one minority parent were low income, nearly twice the proportion of white working families.

The downturn has also been particularly difficult for workers with the least education, a trend that was evident even when the economy was better. Unemployment for high school dropouts peaked at 15 percent during the downturn, compared with 4 percent among workers with at least a bachelor's degree.

"This is a challenging situation from a policy standpoint. But it is more challenging for these families," Roberts said, adding that policymakers usually focus on the middle- and upper-middle classes. "Presumably this report will provide an even more compelling case to get police makers on the case."

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