Information about Working Poor

Working poor is a term used to describe individuals and families who maintain regular employment but remain in relative poverty due to low levels of pay and dependent expenses. Officially, in the United States, the working poor are defined as individuals who spent at least 27 weeks in the labor force (working or looking for work), but whose incomes fell below the official poverty level. Often, those defined as "working poor" have negative net worth and lack the ability to escape personal and economic contingencies.

The working poor are often distinguished from paupers, poor who are supported by government aid or charity.

The extent and causes of "working poor" conditions

There are various issues to consider when studying the extent, cause and definition of "working poor" and "working poor" conditions. One such issue is the definition of poverty. Given on a global scale, the definition and requisites to be considered impoverished or in poverty may sharply contrast the conditions of any one specific country. When viewed at a high level, the global definitions of poverty are typically much lower than that of more prosperous countries. In areas such as the United States, England, France and other more prosperous nations, the poverty line is much higher than that of countries with typically lower or even negative economic conditions. When considering localized differences, such as in the United States, differences in market rates of goods and services may impact the effects of poverty.

Yet another consideration to be made with a global view is data collection and reporting methods. With no globally accepted standards on data recording and reporting, variances may be obscured, omit or inflate specific factors considered in determining poverty levels or measures of the working poor.

The "working poor" In the United States

The nature and extent of the working poor in the United States is a contested subject; while both sides of the political spectrum acknowledge that there are non-negligible numbers of working people living near or below the poverty line, there is disagreement as to whether or not this reflects a genuine flaw with current economic policy, and what the response should be.

In the United States, according to the government Bureau of Labor Statistics, there were 6.4 million working poor in 2000 [1]; by 2003 the number had grown to 7.4 million [2]. In 2004, Business Week suggested [3] that "the share of the workforce earning subpoverty pay [is] 24% [in 2003]".

The question of the working poor, how many there are and the reasons for their situation, remains controversial. For example, the Business Week magazine article cited above, which was generally critical of the political response to the problem of the working poor, itself received criticism from Townhall.com columnist Thomas Sowell, who claimed that the magazine had, among other sins, inflated statistics.

Sowell claimed that "census data show that most people who are working are not poor and most people who are poor are not working", and that workers who were part-time or under the age of 25 should not be counted as working poor [4]. Citing the author Horatio Alger, Sowell suggested that the intelligentsia had dismissed words such as moxie and gumption, and that the working poor themselves, and not larger socioeconomic factors such as the lack of labor unions and the changing nature of employment, as suggested by Business Week, were to blame for the situation.

Possible problems faced by the working poor

Workers without marketable skills may face low wages, potential economic exploitation, unpleasant working conditions, and few opportunities to attain skills that would allow them to escape their personal and economic situations. Unexpected costs (such as medical or repair costs) can substantially decrease the economic ability of the working poor to manage their lives.

In some cases, members of the working poor work at multiple part-time jobs, which require nearly full-time commitment but are classified as "part time". In this situation some benefits, like medical insurance, are not paid by employers [5]. This situation is sometimes referred to as precarious employment.

A common expression of working poor conditions states that such individuals often live from "paycheck to paycheck".

Policy responses

Many governments have initiated programs with the proclaimed intention of assisting those who may be considered impoverished or working poor. Much debate is centered upon the efficacy of such programs. In the United States, fiscal conservatives tend to argue in favor of the approaches recommended by Trickle-down economics, in which stimulation of the investment sector is assumed to lead to increased job opportunities and a better economy. Examples of conservative measures include lowering taxes and reducing governmental regulation of business and trade. Fiscal progressives tend toward a more direct approach, usually with increased taxes and regulation. The government funds social welfare programs like food stamps and vouchers, subsidized housing, meal plans, and healthcare, and regulating wages, or by helping the working poor become more competitive in the labor market, through such measures as job training programs, low-interest student loans, and small business loans.

See also

• Minimum wage
• Labor law
• Living wage
• Income disparity
• Wage slavery
• Poverty
• Welfare trap
• Wealth condensation
• Lucky duckies
• Nickel and Dimed by Barbara Ehrenreich

Sources

• David Shipler, The Working Poor: Invisible in America, Alfred A. Knopf, New York, 2004.
• Precarious Employment literature review by New Zealand government agency
• Precarious Employment in Australia