Who Are the Working Poor?May 10, 2017 The number of working poor in the United States surged up 41 percent between 2007 and 2012 before beginning to decline again in 2013. By 2015, the number of working poor remained 14 percent above the level in 2007, prior to the Great Recession. The working poor are individuals who were in the labor force for at least 27 weeks during the year, but still had incomes below the official poverty level. About 8.5 million people fit that definition in 2015, still well above the pre-recession level of 7.5 million in 2007. The working poor accounted for 5.6 percent of all people who were in the labor force 27 weeks or more in 2015.
These figures come from the Bureau of Labor Statistics’ (BLS) annual Profile of the Working Poor.
Those who were usually employed part time were more likely to be among the working poor. The working poor rate was 3.4 percent for those workers who were usually employed full time, while it was 14.1 percent for those usually employed part time.
Younger workers were more likely to be poor. In 2015, the working poor rate by age group was highest for those ages 20 to 24 (12.2%) and 16 to 19 (10.8%). It then declined with each successive age group. Fewer than 4 percent of workers over the age of 45 were among the working poor, and the rate dropped to 1.6 percent for workers ages 65 and over.
Nationally, slightly more women were considered working poor than men in 2015. In addition, women who head families were more than twice as likely to be among the working poor as men who head families.
Workers with higher levels of education are less likely to be among the working poor. Very few college graduates who were in the labor force for 27 weeks or more in 2015 were among the working poor (1.7%), while 16.2 percent of those with less than a high school diploma were among the working poor.
A Higher Share of Part-Time Workers Are Poor
About half (49%) of those characterized as working poor in 2015 were usual full-time workers. Two out of five were usual part-time workers. Many of these workers were voluntarily working part time. Back in 2013, among the working poor, voluntary part-time workers were still outnumbered by those involuntarily working part time who would have rather had full-time work. By 2015 that trend flipped, with more than half of part-time workers who met the definition of working poor voluntarily working part time.
While many of the working poor were usual full-time workers, these workers only accounted for 3.4 percent of all workers who usually work full time. In contrast, 14.1 percent of usual part-time workers fit the description of the working poor. For voluntary part-time workers, the working poor rate is 10.4 percent, but the rate skyrockets for involuntary part-time workers – the working poor account for 24.7 percent of all involuntary part-time workers.
Being in the labor force the entire year made little difference in 2015 in the likelihood of being among the working poor. In total, the working poor rate for those in the labor force 50 to 52 weeks is 5.1 percent, compared with 5.6 percent for those in the labor force at least 27 weeks.
Young Adults and Women More Likely to Be Poor
People ages 20 to 24 have the highest working poor rate, at 12.2 percent. The working poor rate goes down with each successive age group after the 20 to 24 year old group.
By gender, women are more likely to be among the working poor than men. Overall, women’s rate was 6.3 percent in 2015, while men’s rate was 5.0 percent. Women’s working poor rate is higher than men’s in every age group.
For those ages 20 to 24 – the group that has the highest working poor rate – women’s working poor rate is more than 3 percentage points higher than men’s rate. The working poor rates for men and women become closer as workers age – possibly highlighting the differences between genders in family care responsibilities and their effect on earnings, especially for the nation’s younger working women.
Family Structure Plays a Role
For families, the presence of children under 18 has a large impact on the likelihood of being among the working poor. Families with children under 18 and at least one member in the labor force for 27 weeks or more were five times more likely to live in poverty than those without children.
Married-couple families are the least likely of all family types to be among the working poor, with a rate of 3.7 percent overall. Those with children under 18 years have a higher rate, 6.2 percent, than those without children present (1.4%).
Families maintained by women have a much higher rate than average – 18.3 percent were among the working poor in 2015. The rate surges to about one-quarter (24.8%) for these families when children under 18 are present. Without children, families maintained by women have a working poor rate that is about average (7.4%).
While families maintained by men have a higher rate than married-couple families, it doesn’t come close to the rate for families maintained by women. Overall, 11.1 percent of families maintained by men were among the working poor in 2013. Just like with other groups, rates are higher for families with children under 18; 14.1 percent of these families were among the working poor, while just 8.1 percent of those without children fell into that category.
Education Reduces Likelihood of Being Poor
It is often said – and with good reason – that education pays. People without a high school diploma are much more likely than other groups to be among the working poor. Among workers with less than a high school diploma who were in the labor force at least 27 weeks, 16.2 percent were among the working poor in 2015. High school graduates, on the other hand, had a working poor rate of 7.6 percent. The rate for those with some college but no degree was 6.6 percent. People with associate degrees had a working poor rate of 3.8 percent. Of those workers with bachelor’s or higher degrees, only 1.7 percent were among the working poor.
Men have lower working poor rates at all levels of education, except among those with bachelor’s or advanced degrees, where the rate is very similar, at 1.8 percent for men and 1.6 percent for women. Working poor rates differed the most – and were the highest – for men and women with less than a high school diploma, where 19.8 percent of women and 14.1 percent of men were among the working poor.
The working poor rate remains above the rate prior to the Great Recession. In 2007, 5.1 percent of U.S. workers in the labor force for 27 weeks or more had income below the poverty threshold. The rate peaked at 7.2 percent in 2010, and declined to 5.6 percent in 2015. With strong job growth in the last couple of years and the economy near full employment by 2016, the rate is likely to improve further in the next couple of years.