Working and Poor in the USA; U.S. Recovery Hasn't Done Much
* Working and Poor in the USA - Bill Quigley
* U.S. Recovery Hasn't Done Much for Employment - Mark
Working and Poor in the USA
by Bill Quigley
Submitted to Portside by the author
January 19. 2012
"Our nation, so richly endowed with natural resources and with a capable and industrious population, should be able to devise ways and means of insuring to all our able-bodied men and women, a fair day's pay for a fair day's work." Franklin Delano Roosevelt, 1937
Millions of people in the US work and are still poor. Here
are eight points that show why the US needs to dedicate
itself to making work pay.
One. How many people work and are still poor?
In 2011, the US Department of Labor reported at least 10
million people worked and were still below the unrealistic
official US poverty line, an increase of 1.5 million more
than the last time they checked. The US poverty line is
$18,530 for a mom and two kids. Since 2007 the numbers of
working poor have been increasing. About 7 percent of all
workers and 4 percent of all full-time workers earn wages
that leave them below the poverty line.
Two. What kinds of jobs do the working poor have?
One third of the working poor, over 3 million people, work
in the service industry. Workers in other occupations are
also poor: 16 percent of those in farming; 11 percent in
construction; and 11 percent in sales.
Three. Which workers are most likely to be working and
Women workers are more likely to be poor than men. African
American and Hispanic workers are about twice as likely to
be poor as whites. College graduates have a 2 percent
poverty rate while workers without a high school diploma
have a poverty rate 10 times higher at 20 percent.
Four. What about benefits for low wage workers?
Ten percent of US workers earn $8.50 an hour or less
according to the US Department of Labor. About 12 percent
have health care and about 12 percent have retirement
benefits. Nearly one in four get paid sick leave and less
than half get paid vacation leave.
Five. What rights do the working poor have?
Most workers have a right to earn at least the federal
minimum wage of $7.50 an hour. Tipped employees are
supposed to get at least $2.13 each hour from their employer
and if the worker does not earn enough in tips to make the
$7.50 minimum wage, the employer must make up the
difference. People who work more than 40 hours in a
workweek are entitled to one and one-half of their regular
pay for each hour of overtime.
Six. What about wage theft from the working poor?
Many low wage workers have part of their earnings stolen by
their employers. Examples include not paying people the
full minimum wage, not paying required overtime, stealing
from tipped employees, or fraudulently classifying workers
as independent contractors. A survey of over 4000 low wage
workers in Chicago, Los Angeles and New York conducted by
university and non-profit researchers found: 26 percent of
the workers were paid less than the minimum wage in the
previous week, a majority were underpaid by more than $1 an
hour; a significant number worked overtime the previous week
and were not paid the legally required overtime; many were
required to come early or stay late and work "off the clock"
and were not paid for it; almost a third of the tipped
workers were not paid the minimum wage and more than 1 in 10
tipped workers had some of their money stolen by their
employer or supervisor.
Seven. What is a living wage in the US?
Dr. Amy Glasmeier of Penn State University has created a
Living Wage Calculator that estimates the hourly wage needed
to pay the cost of living for low wage families in the US.
It breaks down the cost of living by state and locality
across the nation. In New Orleans, a mom with one child
needs to earn $17.52 to make ends meet. In New York, the
mom with one child should earn $19.66 to make it. If we
now realistically calculate the number of people who work
and do not earn a living wage, the numbers of working poor
in the US skyrocket to several tens of millions.
Eight. What about jobs for the unemployed and
The US Labor Department estimated recently that 13 million
people were unemployed. Another 8 million people were
working part-time but wanted full-time work. Even more
millions who are not working are not counted in those
numbers because they have been unemployed so long.
A study by Northeastern University found that in the poorest
families, unemployment is nearly 31 percent. Underemployment
is also much more of a problem in poor homes, with over 20
percent of those workers reporting they are working part-
time but seeking full-time work.
Our nation can do so much more. We say our country values
work. It is time to do something about it.
If the US truly values work, we need to support the millions
of our sisters and brothers who are low wage workers. Steps
needed include: raising the minimum wage to a living wage;
protecting workers from getting ripped off; making it easier
for workers to organize together if they choose to; and
creating jobs, public jobs if necessary, so that everyone
who wants to work can do so. Many are already working on
these justice issues.
[Bill Quigley teaches law at Loyola University New Orleans
and is Associate Legal Director of the Center for
Constitutional Rights. Thanks to Rob Dordan and Kim Bobo
for help with this. A version with sources is available.
You can reach Bill at [log in to unmask]
For those interested in learning more about this, see the websites of:
Interfaith Worker Justice
National Employment Law Project
National Jobs for All Coalition
U.S. Recovery Hasn't Done Much for Employment
by Mark Weisbrot
Center for Economic and Policy Research (CEPR)
January 19, 2012
[This article was distributed by McClatchy Tribune
Information Services on January 18, 2012 and published by
The Sacramento Bee and other newspapers.
The U.S. recession officially ended in June of 2009, but
most Americans don't feel like we are in a recovery. That's
because it's been a weak recovery, with the size of the
economy barely bigger today than it was four years ago, when
the recession started.
Since America is a rich country, it is not growth itself
that matters most but employment and, of course, the
distribution of income. And the employment numbers are just
The simplest measure is the percentage of the working-age
population that is employed. That peaked at 63.4 percent in
December 2006. It plummeted to a low of 58.2 percent last
July and is hardly different now - 58.5 percent in the
What this means is that we need about 10 million jobs to get
back to full employment. There was a lot of happy talk
earlier this month when the December job numbers were
released. They showed 200,000 payroll jobs added in
December, and the unemployment rate falling to 8.5 percent.
Adding even 200,000 jobs a month is not very good for an
economy that needs at least 90,000-100,000 jobs a month just
to keep up with the growth of the working-age population.
And as my colleague Dean Baker pointed out, the latest jobs
numbers have probably been over-optimistic. Realistically,
he notes, at present trends of job growth we will not hit
full employment until 2028. This would be an economic
failure of disastrous proportions.
Looking at it from the unemployment side, the U.S.
government has a broader measure of unemployment that
includes people who are involuntarily working part-time and
people who have given up looking for work. This is currently
at 15.2 percent of the labor force, or 23.7 million people
who need work.
To make matters worse, we have had record numbers out of
work for more than 6 months - more than 40 percent of the
unemployed over the last two years. Long-term unemployment
is much more devastating for workers and their families.
And recent research shows that even this measure
underestimates the current long-term hardship [PDF] in the
Although there has been some fear of the economy lapsing
into recession again, the more likely scenario in the
foreseeable future is slow growth with intolerable levels of
unemployment, along with rising poverty and inequality, and
accompanying social ills.
Of course there are many things that the government could do
to restore full employment. The Obama administration's 2009
Recovery Act, or stimulus, was only about one-eighth the
size of the lost demand from the bursting of the housing
bubble. It saved an estimated 1.2 - 2.8 million jobs, not
nearly enough. Obviously a much bigger stimulus, and one
more focused on creating employment, is needed - but the
politicians are afraid to talk about it. And the likely
Republican presidential candidate, Mitt Romney, promises to
create much more unemployment through massive cuts in the
Another way to reduce unemployment would be for the
government to subsidize and encourage employers to allow for
shorter hours, as an alternative to laying people off.
Unemployment insurance funds, along with other money, could
be used for this purpose. This has proved very successful in
Germany, where unemployment has been reduced to 5.5 percent
- lower than it was before the world recession.
Of course, so long as our political discussion is fixated on
a non-existing "threat" from the federal debt, these
solutions will be out of reach. The current net interest
burden on the federal debt is 1.4 percent of GDP, about as
low as it has been for more than 60 years.
The biggest burden we are carrying is the economic
illiteracy of our leaders, for which Americans are paying a
very steep price.
[Mark Weisbrot is co-director of the Center for Economic and
Policy Research, in Washington, D.C. He is also president of
Just Foreign Policy.]
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