In the U.S., More and More ‘Working Poor’

An increasing number of American families are struggling with poverty as, although both parents found new jobs after the recession, these jobs are mostly low-paying, according to an analysis published today.

Many people in the U.S. re-entered the workforce in 2011, but these are jobs such as cashiers, housekeepers, waiters, and similar low-paying positions, which offer shorter working hours and benefits, according to The Working Poor Project, a privately funded initiative aimed at improving the economic security of low-income families.

Data from this initiative shows that in 2011, the number of families in the U.S. where both parents work, known as the ‘working poor’, increased by 200,000 compared to the previous year.

Approximately 10.4 million such families, or a total of 47.5 million Americans, now live near the poverty line, which is defined in the U.S. as an income of $22,811 per year for a family of four.

-Although many people are re-employing, they often take jobs with lower wages and less job security compared to middle-class jobs they held before the economic crisis. This means that about one-third of families where both parents are employed likely do not have enough money to meet basic needs, the analysis states.

These results were published three years after the recession in the U.S. They show that the top 20 percent of wealthiest Americans receive 48 percent of all earned income, while the bottom 20 percent receive less than five percent.

There is also an increasing number of American children living in ‘working poor’ families. Their number increased by approximately 2.5 million over a five-year period. In 2011, about 23.5 million, or 37 percent of American children lived in ‘working poor’ families, compared to 21 million or 33 percent in 2007.

In low-paying jobs, wages are often minimal. They can vary between states, but at the national level, the minimum wage has been $7.25 per hour since 2010.

Any misfortune – a child’s illness or a car accident – is a significant hardship for such ‘working poor’ families, says co-author of the analysis Brandon Roberts.

Roberts stated that the results of the analysis are somewhat surprising, after the Census Bureau announced last year that the poverty rate in the U.S. had stabilized.

-With economic improvement, we would expect that low-income families would benefit from it, which should contribute to a reduction or at least stabilization of these numbers. However, in reality, the data indicates that this moderate economic growth does not contribute to improving the situation for these families, Roberts stated.