The American Worker - Poverty And The Working Poor

The United States has a persistent problem with poverty, with 34.6 million people—12.1% of the population—living at or below the federal poverty level in 2002 (U.S. Department of Labor, Bureau of Labor Statistics, "A Profile of the Working Poor, 2002," September 2004). While most of America's poor were children, about 7.4 million people were classified as "working poor"—those people who are in the workforce at least twenty-seven weeks a year but whose income still falls below the poverty level. The U.S. Department of Health and Human Services (HHS) sets poverty guidelines for the forty-eight contiguous states and Washington, D.C., Hawaii, and Alaska; HHS guidelines for 2005 were $9,570 per year for one person, $12,830 for a two-person family, and $19,350 for a family of four (Federal Register, vol. 70, no. 33, February 18, 2005).

According to the BLS "Profile of the Working Poor, 2002" (the most recently published profile), 6% of American women are among the working poor, compared to only 4.7% of men, and women from all racial and ethnic groups except Asian-Americans were more likely to be among the working poor than men from any racial or ethnic group. African-American women had the highest incidence of poverty, at more than twice the rate of their male counterparts. Although most of the working poor were white (71%), a greater proportion of African-Americans and Hispanics lived in poverty (10.5% of African-Americans and 10.4% of Hispanics, versus 4.5% of whites). Because they have higher rates of unemployment and earn lower wages, young workers make up a significant portion of those living in poverty. Of those who worked at least twenty-seven weeks in 2002, 9% of sixteen- to nineteen-year-olds and 10.2% of twenty- to twenty-four-year-olds were among the working poor.

Poverty varied greatly among workers in different professions. In general, management and professional occupations, which tended to require higher levels of education, saw lower amounts of poverty among workers (2% were classified as working poor). Occupations in industries such as services, natural resources, construction, and maintenance tended to have more workers living in poverty: 10.3% of service workers were poor in 2002, and 29.3% of all people classified as the working poor were employed in service industries; 13.2% of those who did farm work and 7.8% of construction workers were considered poor.

Analysts consider three continuing problems in the labor market to be responsible for most poverty among working people: low wages, periodic unemployment, and involuntary part-time work. A large majority (80.9%) of the working poor who typically worked full time experienced at least one of these conditions in 2002: 65.4% earned low wages and 35% experienced unemployment, while 5.2% experienced all three problems.