Inequality Rages as Dwindling Wages Lock Millions in Poverty

The official unemployment rate in the US may be slowly ticking down, but the rank of those who classify as ‘the working poor’ has continued to skyrocket, according to a new report.

A server waits on customers. Hit hardest by the trend of stagnant wages are those in service industries, like retail jobs, food preparation, clerical work and customer assistance. (Jeff Adkins/For the Chicago Tribune) Along with overall income inequality growth in the US, a new report by Working Poor Families Project says that over 200,000 families fell into poverty in 2011 even with both parents working. 

National job growth saw a recovery from the worst days following the 2008 housing crash and subsequent financial crisis, but even as the recession ebbed in some areas or for some groups, many middle class or lower-middle class workers who returned to employment did so with much reduced wages.

As lead author of the report, Brandon Roberts, points out in an op-ed at Reuters on Tuesday:

These are not just the unemployed. Rather they are families that, despite having a working adult in the home, earn less than twice the federal poverty income threshold — a widely recognized measure of family self-sufficiency. They are working, but making too little to build economically secure lives. And their number has grown steadily over the past five years.

They are cashiers and clerks, nursing assistants and lab technicians, truck drivers and waiters. Either they are unable to find good, full-time jobs, or their incomes are inadequate and their prospects for advancement are poor.

The report, which analyzed figures from the US Census in 2011, determined that nearly 10.4 million such families – or 47.5 million Americans – now live near poverty, defined as earning less than $45,622 for a family of four.

Data showed that the top 20 percent of Americans received 48 percent of all income while those in the bottom 20 percent got less than 5 percent.

Statistics also showed that roughly 23.5 million, or 37 percent, of U.S. children lived in working poor families compared with about 21 million, or 33 percent, in 2007, the report said.

“Although many people are returning to work, they are often taking jobs with lower wages and less job security, compared with the middle-class jobs they held before the economic downturn,” the report said. “This means that nearly a third of all working families … may not have enough money to meet basic needs.”

“We’re not on a good trajectory,” Brandon Roberts, who manages the privately-funded Working Poor Families Project, told The Washington Post. “The overall number of low-income working families is increasing despite the recovery.”

And Reuters reports:

The group’s analysis adds to the body of data focused on the slipping U.S. middle class even as there are signs of the nation’s economy slowly coming back to life with improvements in the housing sector and lower unemployment rate.

For some Americans, the comeback has yet to begin.

Data showed that the top 20 percent of Americans received 48 percent of all income while those in the bottom 20 percent got less than 5 percent, the report said.

The analysis also found regional differences.

States in the South, such as Georgia and South Carolina, and those in the West, such as Arizona and Nevada, had the greatest increase in the number of working poor. The increase was slower in the Mid-Atlantic and Northeast.

“It’s important to draw attention to the fact that there are real families behind those statistics,” said Alan Essig, who heads the Georgia Budget and Policy Institute, adding that his state is still struggling with housing and unemployment.

And the Washington Post adds:

The growth in the ranks of the working poor coincides with continued growth in income inequality. Many of the occupations experiencing the fastest job growth during the recovery also pay poorly. Among them are retail jobs, food preparation, clerical work and customer assistance.