Employment and Poverty Among the Homeless - Employment And Wages

The poverty rate is established by counting the number of families with before-tax income that is lower than the poverty threshold set for a family that size, so employment and wages are an essential part of the determination.

Household Income

Median annual household income in 2003 was $43,318. Half of all American households earned less than this amount and half earned more. (See Table 3.3.) Not surprisingly, median household income varied greatly according to the composition of the household. The median income for married-couple families in 2003 was $62,405, but for female-headed families with no husband present, it was only $29,307, less than half that of a couple-headed family. Race and ethnicity were also factors. In 2003 Asian households had the highest median income ($55,699). The median income for white, non-Hispanic households was $47,777; for people of Hispanic origin it was $32,997; and for blacks it was $29,689. The median income for all groups except for Asians had fallen from the previous year.

Educational Attainment and Income Level

A strong correlation exists between income level and educational attainment. The poor tend to have less education, and a lower proportion of well-educated people are poor. Table 3.4 presents average earnings by level of highest degree. Generally, the higher the degree a person earns, the higher their average income.

When educational attainment is added to the comparison of family income distribution, a clear and predictable pattern emerges. In 2001 families whose householder had TABLE 3.3
Money income and earnings by selected characteristics, 2002 and 2003
[Income in 2003 dollars. Households and people as of March of the following year.]

	2002		2003		Percentage change income (dollars) (2003 less 2002)
		Median money income (dollars)		Median money income (dollars)
Characteristic	Number (thousands)	Value	Number (thousands)	Value	Estimate
Households
All households	111,278	43,381	112,000	43,318	− 0.1
Type of household
Family households	75,596	53,911	76,217	53,991	0.1
Married-couple	57,320	62,657	57,719	62,405	− 0.4
Female householder, no husband present	13,620	29,665	13,781	29,307	− 1.2
Male householder, no wife present	4,656	42,667	4,717	41,959	− 1.7
Nonfamily households	35,682	25,988	35,783	25,741	− 1.0
Female householder	19,662	21,392	19,647	21,313	− 0.4
Male householder	16,020	32,123	16,136	31,928	− 0.6
Racea and Hispanic origin
White alone or in combination	92,740	45,994	93,196	45,572	f − 0.9
White aloneb	91,645	46,119	91,962	45,631	f − 1.1
White alone, not Hispanic	81,166	47,974	81,148	47,777	− 0.4
Black alone or in combination	13,778	29,845	13,969	29,689	− 0.5
Black alonec	13,465	29,691	13,629	29,645	− 0.2
Asian alone or in combination	4,079	53,483	4,235	55,262	3.3
Asian aloned	3,917	53,832	4,040	55,699	3.5
Hispanic origin (of any race)	11,339	33,861	11,693	32,997	f − 2.6
Age of householder
Under 65 years	88,619	50,644	88,951	50,171	f − 0.9
15 to 24 years	6,611	28,466	6,610	27,053	f − 5.0
25 to 34 years	19,055	46,368	19,159	44,779	f − 3.4
35 to 44 years	24,069	54,747	23,222	55,044	0.5
45 to 54 years	22,623	60,373	23,137	60,242	− 0.2
55 to 64 years	16,260	48,284	16,824	49,215	f 1.9
65 years and older	22,659	23,682	23,048	23,787	0.4
Nativity of the householder
Native	97,365	44,212	97,840	44,347	0.3
Foreign born	13,912	38,849	14,159	37,499	f − 3.5
Naturalized citizen	6,423	46,471	6,567	46,049	− 0.9
Not a citizen	7,490	34,758	7,592	32,806	f − 5.6
Region
Northeast	21,229	46,913	21,017	46,742	− 0.4
Midwest	25,630	44,621	25,643	44,732	0.2
South	40,107	40,427	40,742	39,823	f − 1.5
West	24,313	46,177	24,598	46,820	1.4
Residence
Inside metropolitan areas	90,075	46,294	90,613	46,060	− 0.5
Inside central cities	33,543	37,708	33,717	37,174	f − 1.4
Outside central cities	56,532	51,879	56,896	51,737	− 0.3
Outside metropolitan areas	21,203	35,448	21,387	35,112	− 0.9
Shares of household income quintiles and gini index
Lowest quintile	22,256	3.5	22,400	3.4	f − 2.9
Second quintile	22,256	8.8	22,400	8.7	− 1.1
Third quintile	22,256	14.8	22,400	14.8	—
Fourth quintile	22,256	23.3	22,400	23.4	0.4
Highest quintile	22,256	49.7	22,400	49.8	0.2
Gini index of income inequality	111,278	0.462	112,000	0.464	0.4
Earnings of full-time year-round workers
Men	58,761	40,332	58,772	40,668	0.8
Women	41,876	30,895	41,908	30,724	− 0.6

the least education earned the least, while the majority of families with a highly educated householder earned the highest incomes. (See Figure 3.5.) Of heads of households with less than a ninth-grade education, one-half earned under $25,000, and 24.5% earned under $15,000 in 2001. On the other hand, more than half the families headed by a person with a doctoral degree (54.4%) earned $100,000 or more.

TABLE 3.3
Money income and earnings by selected characteristics, 2002 and 2003 [CONTINUED]
[Income in 2003 dollars. Households and people as of March of the following year.]
SOURCE: Carmen DeNavas-Walt, Bernadette D. Proctor, and Robert J. Mills, "Table 1. Money Income and Earnings Summary Measures by Selected Characteristics: 2002 and 2003," in Income, Poverty, and Health Insurance Coverage in the U.S.: 2003, U.S. Census Bureau, Current Population Reports, P60-226, August 2004, http://www.census.gov/prod/2004pubs/p60-226.pdf (accessed February 18, 2005)

	2002		2003		Percentage change income (dollars) (2003 less 2002)
		Median money income (dollars)		Median money income (dollars)
Characteristic	Number (thousands)	Value	Number (thousands)	Value	Estimate
Per capita income
Totala	285,933	23,316	288,280	23,276	−0.2
White alone or in combination	235,036	24,511	236,875	24,442	− 0.3
White aloneb	230,809	24,695	232,254	24,626	− 0.3
White alone, not Hispanic	194,421	26,727	194,877	26,774	0.2
Black alone or in combination	37,350	15,619	37,651	15,583	− 0.2
Black alonec	35,806	15,795	36,121	15,775	− 0.1
Asian alone or in combination	12,504	23,785	12,905	23,654	− 0.5
Asian aloned	11,558	24,684	11,869	24,604	− 0.3
Hispanic origin (of any race)	39,384	13,796	40,425	13,492	− 2.2
Note: "—" represents zero or rounds to zero. a Data for American Indians and Alaska Natives, and Asian, Native Hawaiian and Other Pacific Islanders are not shown separately. b The 2003 and 2004 CPS asked respondents to choose one or more races. White alone refers to people who reported white and did not report any other race category. The use of this single-race population does not imply that it is the preferred method of presenting or analyzing data. The Census Bureau uses a variety of approaches. About 2.6 percent of people reported more than one race in Census 2000. c Black alone refers to people who reported black and did not report any other race category. d Asian alone refers to people who reported Asian and did not report any other race category.

TABLE 3.4
Mean earnings by highest degree earned, 2002
[In dollars. For persons 18 years old and over with earnings. Persons as of March the following year.]
SOURCE: "Table 215. Mean Earnings by Highest Degree Earned: 2002," in Statistical Abstract of the United States: 2004-2005, U.S. Census Bureau, 2004, http://www.census.gov/prod/2004pubs/04statab/educ.pdf (accessed February 21, 2005)

		Level of highest degree
Characteristic	Total persons	Not a high school graduate	High school graduate only	Some college, no degree	Associate's	Bachelor's	Master's	Professional	Doctorate
All personsb	36,308	18,826	27,280	29,725	34,177	51,194	60,445	112,845	89,737
Age
25 to 34 years old	32,527	19,235	26,278	28,879	30,662	42,623	48,598	75,247	62,190
35 to 44 years old	41,963	22,324	30,259	37,533	37,440	58,267	63,758	123,811	88,818
45 to 54 years old	45,392	21,231	31,251	40,225	39,167	60,680	67,096	126,230	112,538
55 to 64 years old	42,381	24,761	30,893	37,450	34,848	55,057	62,640	132,372	81,166
65 years old and over	36,611	18,949	27,519	29,809	34,331	51,612	61,151	114,981	91,771
Sex
Male	44,310	22,091	32,673	36,869	42,392	63,503	73,629	138,827	99,607
Female	27,271	13,459	21,141	22,292	27,341	37,909	47,368	61,583	66,426
Whitec	37,376	19,264	28,145	30,570	34,876	52,479	60,787	115,523	92,125
Male	45,793	22,539	33,920	38,095	43,494	65,439	74,426	140,965	103,787
Female	27,512	13,354	21,388	22,452	27,480	37,903	47,209	60,944	64,106
Blackc	28,179	16,516	22,823	26,711	30,391	42,285	51,974	96,368	69,780
Male	31,790	19,294	25,582	31,858	36,028	47,018	60,647	a	a
Female	25,131	13,748	20,209	22,455	26,940	38,741	47,765	a	a
Hispanicd	25,824	18,981	24,163	26,459	31,710	40,949	58,814	81,186	a
Male	29,084	21,611	27,992	31,545	37,365	46,115	59,901	90,767	a
Female	21,008	13,694	18,810	20,707	25,888	35,357	57,447	a	a
aBase figure too small to meet statistical standards for reliability of a derived figure. b Includes other races, not shown separately. c For persons who selected this race group only. The 2003 Current Population Survey (CPS) allowed respondents to choose more than one race. Beginning 2003 data represent persons who selected this race group only and exclude persons reporting more than one race. The CPS in prior years only allowed respondents to report one race group. d Persons of Hispanic origin may be of any race.

FIGURE 3.5
Family income ranges of the least and the most educated, 2001
SOURCE: Adapted from "Table 673. Money Income of Families—Distribution by Family Characteristics and Income Level: 2001," in Statistical Abstract of the United States: 2004-2005, U.S. Census Bureau, 2004, http://www.census.gov/prod/2004pubs/04statab/income.pdf (accessed February 21, 2005)

A lack of education leaves a person ill equipped to support him- or herself, or a family, comfortably. Education opens doors and opportunities that are simply not available to the undereducated, especially in an economy that is transitioning from a reliance on manufacturing to a reliance on the information and service industries.

Growth of Jobs in Low Wage Industries

During the 1970s manufacturing industries began closing down plants and moving their production facilities to cheaper labor markets at home and abroad. For much of the twentieth century the United States had been primarily an industrial economy. The last two decades of the century saw the beginning of the nation's transition to what has now been dubbed the information or service economy.

Figure 3.6 shows the change in employment between 1980 and 2001 by industrial sector. The industry that grew the most was the service industry. In 1980 the service sector employed 28.8 million people; by 2001 it had grown to employ 50.5 million, a 75.6% increase. FIGURE 3.6
Percent change in employment by industrial sector, 1980-2001
SOURCE: Created by Information Plus from data in "No. 591. Employment by Industry: 1980 to 2001," in Statistical Abstract of the United States: 2002, U.S. Census Bureau, December 2002, and "Table 45. Wage and Salary Workers Paid Hourly Rates with Earnings at or below the Prevailing Federal Minimum Wage by Occupation and Industry," U.S. Department of Labor, Bureau of Labor Statistics, January 2003, http://www.bls.gov/cps/cpsaat45.pdf(accessed April 15, 2005) Industries that pay higher wages than those offered in the services, like mining and manufacturing, shrank during this same period, by 42.1% and 13.5% respectively.

The shift in employment from production work to service work has shifted workers from higher to lower paying jobs. According to the U.S. Bureau of Labor Statistics, average hourly wages earned by people employed in the service industries are much lower than average hourly wages earned in the fields of manufacturing, mining, and construction.

Minimum Wage Jobs

The Bureau of Labor Statistics provides data on which industrial sectors employ the highest percentage of people at minimum wage. Table 3.5 shows the total number of wage and salary workers by occupation and by industry. It also shows the number and percent of those workers who, in 2004, earned at or below the federal minimum wage of $5.15 per hour.

Almost one in ten service workers (9.1%) earned at or below the federal minimum wage, and almost one in five food preparation and service workers (19%) earned TABLE 3.5
Wage and salary workers paid hourly rates equal to or less than the prevailing minimum wage, by occupation and industry, 2004
[Numbers in thousands]

	2004
	Workers paid hourly rates			Total at or below prevailing federal minimum wage
Occupation and industry	Total	Below prevailing federal minimum wage	At prevailing federal minimum wage	Number	Percent of hourly-paid Number workers
Occupation
Management, professional, and related occupations	13,743	39	27	66	0.7
Management, business, and financial operations occupations	3,750	14	2	16.	4
Management occupations	2,120	12	1	13.	6
Business and financial operations occupations	1,630	2	1	3.	2
Professional and related occupations	9,993	25	25	50	.5
Computer and mathematical occupations	762	—	1	2.	2
Architecture and engineering occupations	952	1	2	3.	3
Life, physical, and social science occupations	414	1	1	2.	5
Community and social services occupations	717	2	1	4.	5
Legal occupations	281	—	—	—	—
Education, training, and library occupations	2,024	8	11	19	1.0
Arts, design, entertainment, sports, and media occupations	777	8	6	13	1.7
Healthcare practitioner and technical occupations	4,065	4	3	7	.2
Service occupations	16,381	1,238	256	1,494	9.1
Healthcare support occupations	2,460	21	12	32	1.3
Protective service occupations	1,823	20	4	25	1.3
Food preparation and serving related occupations	6,236	1,036	147	1,183	19.0
Building and grounds cleaning and maintenance occupations	3,608	63	39	102	2.8
Personal care and service occupations	2,254	97	54	151	6.7
Sales and office occupations	20,650	104	146	250	1.2
Sales and related occupations	7,512	66	76	143	1.9
Office and administrative support occupations	13,139	37	69	107	.8
Natural resources, construction, and maintenance occupations	9,368	24	26	50	.5
Farming, fishing, and forestry occupations	603	10	11	22	3.6
Construction and extraction occupations	5,430	7	6	14	.3
Installation, maintenance, and repair occupations	3,335	6	9	15	.4
Production, transportation, and material moving occupations	13,796	78	66	144	1.0
Production occupations	7,708	36	18	55	.7
Transportation and material moving occupations	6,087	42	47	89	1.5
Industry
Private sector	64,708	1,423	467	1,889	2.9
Agriculture and related industries	623	9	10	19	3.1
Nonagriculture and related industries	64,085	1,413	457	1,870	2.9
Mining	312	—	1	1.	2
Construction	5,552	10	8	17.	3
Manufacturing	10,388	38	23	61	.6
Durable goods	6,397	20	8	29.	4
Nondurable goods	3,991	18	15	32	.8
Wholesale and retail trade	12,456	85	96	181	1.5
Wholesale trade	2,038	7	10	16.	8
Retail trade	10,418	78	86	165	1.6
Transportation and utilities	2,915	13	7	21.	7
Transportation and warehousing	2,431	12	7	20.	8
Utilities	485	1	—	1.	2
Information	1,472	4	10	15	1.0
Publishing, except Internet	328	—	2	3.	8
Motion pictures and sound recording	204	3	7	10	4.8
Broadcasting, except Internet	228	—	—	—	—
Telecommunications	600	1	1	2.	3
Financial activities	3,453	13	20	33	1.0
Finance and insurance	2,429	8	10	18.	7
Finance	1,581	3	6	9.	6
Insurance	848	5	4	9	1.1
Real estate and rental and leasing	1,025	6	10	15	1.5
Professional and business services	5,461	37	24	61	1.1
Professional and technical services	2,249	5	9	14	.6
Management, administrative, and waste services	3,212	32	15	47	1.5
Education and health services	11,022	76	62	137	1.2
Educational services	1,263	13	21	34	2.7
Health care and social assistance	9,759	62	41	103	1.1

TABLE 3.5
Wage and salary workers paid hourly rates equal to or less than the prevailing minimum wage, by occupation and industry, 2004 [CONTINUED]
[Numbers in thousands]
SOURCE: "Table 45. Wage and Salary Workers Paid Hourly Rates with Earnings At or Below the Prevailing Federal Minimum Wage by Occupation and Industry," in Household Data Annual Averages, 2004, U.S. Department of Labor, Bureau of Labor Statistics, http://www.bls.gov/cps/cpsaat45.pdf (accessed February 21, 2005)

	2004
	Workers paid hourly rates			Total at or below prevailing federal minimum wage
Occupation and industry	Total	Below prevailing federal minimum wage	At prevailing federal minimum wage	Number	Percent of hourly-paid Number workers
Leisure and hospitality	8,095	1,066	176	1,242	15.3
Arts, entertainment, and recreation	1,198	45	20	65	5.4
Accommodation and food services	6,897	1,021	156	1,177	17.1
Accommodation	1,037	35	9	44	4.2
Food services and drinking places	5,860	986	147	1,133	19.3
Other services*	2,959	71	31	101	3.4
Other services, except private households	2,470	36	27	63	2.5
Other services, private households	489	35	4	39	7.9
Public sector	9,231	60	53	114	1.2
Federal government	1,781	8	11	20	1.1
State government	2,347	15	17	32	1.4
Local government	5,103	37	25	62	1.2
*Includes other industries, not shown separately. Note: The prevailing federal minimum wage was $5.15 per hour in 2004. Data are for wage and salary workers, excluding the incorporated self-employed. They refer to a person's earnings on their sole or principal job, and pertain only to workers who are paid hourly rates. Salaried workers and other nonhourly workers are not included. The presence of workers with hourly earnings below the minimum wage does not necessarily indicate violations of the Fair Labor Standards Act, as there are exceptions to the minimum wage provisions of the law. In addition, some survey respondents might have rounded hourly earnings to the nearest dollar, and, as a result, reported hourly earnings below the minimum wage even though they earned the minimum wage or higher. Beginning in January 2004, data reflect revised population controls used in the household survey.

minimum wage or below. (See Table 3.5.) Almost 8% of service workers who worked in private households earned minimum wage or less. Almost one in seven workers (15.3%) in the leisure and hospitality industry earned this little. In contrast, less than 1% of managers and professionals earned minimum wage or less.

The shift from a primarily industrial economy to one primarily engaged in providing services has been one of the leading factors in a shift in the distribution of wealth in the United States.