Working Hard, Falling Short
The Annie E. Casey Foundation issued a new report this week, called Working Hard, Falling Short. It’s about low-income working families, defined as those earning less than twice the poverty line, or about $36,800 for a family of four. About 1/4 of all working families with children fall into this category, accounting for about 1/3 of the children in working families. Those are pretty grim figures.
Or are they?
Last month’s Washington Post article on the decline of the middle class reported that about 41 percent of all American households (including those without children) make less than $35,000 a year, down from 54 percent in 1967. (All these figures are in inflation adjusted dollars.)
So, is it terrible that so many families are low-income, or encouraging that so few are?
One thing to note is that a significant portion of the gains of the last 30-40 years are due to the increase in women’s labor force participation. A lot of families worked their way out of low-income status by having multiple wage earners contributing to the family income. But that results in child care costs, which come out of the discretionary income. And it doesn’t leave families with as much flexibility to respond to family crises. People feel like they’re working harder just to keep up — and there’s not a whole lot of room in the day for more work.
Are low-wage jobs “worse” than they were 30 years ago? They’re more likely to be in the service sector, less likely to be in manufacturing. They’re less likely to be unionized. They’re less likely to be 9-5 jobs, more likely to be evenings or weekends, keeping the 24-hour economy running. Or they may be variable shift, with the employer deciding how to staff based on the previous week’s sales. I don’t know whether such benefits as employer-provided health insurance and paid leave have gone up or down over that time period — anyone have a data source?
One hint about the problem comes from the title: “Working Hard, Falling Short.” Falling short compared to what? Precisely because average incomes have increased so much, the same amount of money feels like less. And, as Tyagi and Warren argue, it’s not just a matter of envy, but that low-income families have to compete with better off ones for houses in safe neighborhoods, for access to quality schools, and so on.
October 15th, 2004 at 10:54 am
Elizabeth, I’m struck by the fact that all these reports about the dying middle class compare current reality to the mid-60s to early 70s — if I remember correctly, the historical period with the highest-ever standard of living for the average US citizen. Were the 60s and 70s a historical aberration, and we’re now actually living through a correction? What if we compare these numbers to, say, the 1920s? (Is that even possible? Spending patterns have changed so radically …)